remains under capitalized and the solvency is in jeopardy. all of which places the american taxpayer at an ongoing substantial risk. clearly, we need to minimize taxpayer risk by making this program more self sufficient and by expanding the private sector's role in protecting against flood disasters. the important question for us is how to accomplish these important objectives. one thing be that also seems clear is that the strategy of short term authorizations and the corresponding temporary program lapses have not worked to minimize taxpayer risk or to expand the private sector's role. in fact the short term authorizations and temporary lapses have had the opposite effect while also destabilizing already fragile housing market. to properly reform and strengthen this program, we need to reauthorize this program on a long term basis and we need to do so promptly to avoid any additional lapses in the program. long term reauthorization will allow us to create stability and

predictability for property owners while moving towards meaningful and necessary reforms. we must also gradually reduce federal subsidies that keep taxpayers on the hook. we must consider how to deal with repetitive lost properties to index coverage for limits for inflation and expand available coverages. we need to consider policies that will limit adverse selection and better spread risks. we need to consider giving private market insurers some certainty and uniformity regarding applicable law under what is necessarily a national flood insurance market. in the end, we need to create the conditions under which the taxpayer risk is minimized, private sector involvement is expanded and policy owners are protected. i look forward to working with the chair woman and my colleagues on both sides of the aisle to achieve these most important national objectives.

i yield back. >> thank you. i would also like to ask for unanimous consents for ms. mccarthy, a member of the full committee, to participate in today's hearing. without objection, so ordered. now recognize mr. cleaver for two minutes. >> thank you, madam chair, to you and to the ranking member. are with the tsunami hitting japan yesterday, or last night, it provides us with a reminder of the devastation that can be caused by flooding and it also is appropriately getting the attention of the fema administrator, which is why the administrator is not with us this morning. madam chair, i think that it's time that we do an overhaul of

the nfrp because obviously, there are concerns. we attempted in the aftermath of katrina to provide some reform to the program. we didn't get very far. something has to be done. we are about $18 billion under water, pardon the pun, and the program simply can't continue as it is now. we need to struggle with and debate, if necessary, the issue of the wind damage coverage which was one of the controversies when we tried to deal with this issue back in 2009. i'm looking forward to raising those questions about reform to our panel this morning. and to actually find out from them whether or not they believe that we have time to do anything before the september expiration

date. because i think, you know, if we move expeditiously, maybe we can address this issue. thank you, madam chair. i yield back. >> thank you. i would also like to submit for the record, by unanimous consent, letters or reports from all state professional insurance agents, international code council, lloyds of london and the national multi-family housing council. without objection, so ordered. we now start with our witnesses. and i would also like to submit without objection the testimony of administrator fugate for the record without objection. we are happy to have with us maurice williams brown, managing director, of the government accountability office and

manager sally mcconkey, manager of state plan manager, coordinated hazard assessment and mapping program illinois state water survey. as you may know, if you can address the dais for five minutes. ms. brown, you're recognized for five minutes. >> thank you, chairman biggert, ranking member, and members of the subcommittee, i appreciate the opportunity to participate in today's hearing on the national flood insurance program. as you know, floods are the most frequent natural disasters in the united states caughting billions of dollars of damage each year. this morning, i would like to share my thoughts on three areas. fema's administration of nfip, the proposed reforms put forth

in the discussion draft and other possible areas for reform. first, nfip serves a vital role in providing protection against flooding to over 5.6 policyholders nationwide. nfip is one of 30 programs or areas on gao's 2011 high risk list. it first appeared on this list in march 2006, after the 2005 hurricane season exposed the potential magnitude of long-standing structural issues on the financial solvency of the program and brought to the forefront a variety of operational and management challenges that must be addressed to especially ensure the long term stability of the program. in our ongoing work, examining fema's management of nfip, our preliminary results reveal challenges and strategic planning, human capital planning, intraagency collaboration. records management, acquisition

management and information technology. while fema continues to make some progress in addressing certain areas, fully addressing these fundamental issues will be vital to its long term operational efficiency and stability. second, using the broad public policy goals identified by gao on the role of the federal government in providing natural catastrophe insurance, i will share some thoughts on reforming an fip at outlined in the discussion draft. these broad goals include charging rates that reflect the risk of flooding, limiting costs to the taxpayer, encouraging broad property owner participation, and encouraging private sector involvement. successfully reforming nfip will require a tradeoff among these often competing goals. for example, currently, nearly one in four policyholders does not pay a full risk rate and others pay grandfathered rates.

the discussion draft addresses the structural issue by phasing out these rates over time. this not only results in rates that reflect the risk of flooding but also can help minimize the cost to taxpayers and could help encourage private sector participation. the tradeoff involves potentially losing policyholders who may opt to leave the program, potentially increasing post disaster federal assistance. however, these challenges can be overcome by a variety of options, including targeted subsidies. the goal of encouraging broad participation could be achieved by increasing targeted outreach to help diversefy the risk pool. one way to do this is make sure the incentive structure is consistent with the goals of expanding participation in low risk zones and areas subject to repeated flooding but has low penetration rates among others.

encouraging private markets is the most difficult challenge because there is currently no broad based private market for flood insurance for most residential and commercial properties. as originally envisioned, nfip was established as a cooperative arrangement between the federal government and the private sector with both assuming a share of the risk. the concepts in the discussion draft would begin to address this issue by giving fema greater authority to explore alternatives. for example, the discussion draft addresses the possibility of reinsurance. finally, while the discussion draft begins to address many of the broad public policy goals, i would like to offer a few other areas for consideration as the reform discussion continues. for example, leveraging mitigation programs and ways to make them more effective, including clarifying fema's authority to charge higher rates when property owners refuse or

do not respond to mitigation offers or allowing fema to apply surcharge when mitigation offers are refused. actuarial rates and whether they should be sufficient to pay for catastrophic losses and any borrowing from treasury. aappropriating for any subsidies until the rates or fully phased in and authorizing fema to map for all present flood risk including erosion. chairman biggert, ranking member gutierrez, this concludes my oral comments and i would be happy to answer any questions at the appropriate time. thank you. >> thank you very much. now recognize ms. mcconkey for five minutes. >> the association of state floodplain managers thanks this subcommittee, chairman biggert and ranking member gutierrez for your attention for the need to

reauthorize the the national flood insurance program. we appreciate the opportunity to comment on the discussion draft legislation and to share our thoughts on the current status of the nfip, challenges the program confronts and opportunities to improve our nation's efforts to reduce flood related losses. the association of state floodplain managers and its 29 chapters represents over 14,000 state and local officials. all asfpm members are concerned with working to reduce our nation's flood related losses. asfpm believes the nfip has been a useful program for addressing flood losses in the nation and should be reauthorized without lapse. a reauthorization of two to three years is important for the stability of the nfip and the associated predictability is important for the lenders, housing industry, home buyers,

policyholders and the write your own insurance companies. while a longer period of authorization is important, it must be balanced with the need to fully consider many important reform ideas which will need further evaluation and consideration by the committee. there are fundamental issues that need to be thoroughly considered. for example, should the nfip accommodate catastrophic losses rather than the average historic alloss year. are there realistic affordable obltti ti objectives? are they expected to cover catastrophic losses. the nation must carefully balance the issue of who pays for development of risk. we believe a two to three year reauthorization will provide the needed reliability while allowing time for fema to complete its rethink nfip -- short person, i guess. allow time for fema to complete

its rethink nfip project and congress and the committee to review and consider the significant policy and legislative options and recommendations for management and operation of the nfip. the report is expected out june of 2011 and we think this project will identify or does identify the tensions and the tradeoffs of various options and needs careful and deliberate consideration. asfpm has identified a number of concepts which we feel should be part of any reform. first, a comprehensive national flood risk management framework is needed to actually reduce flood related losses of life and property in the nation. we must move beyond the current nfip minimum approaches and achieve a fuller integration of federal programs. secondly, bold reforms should be considered to address current flood insurance issues. flood insurance should gradually move towards being actuarial sound to reflect actual risk and

enable market based financial decisions. third, floodplain mapping has changed significantly over the life of the program. better technology, improved methods and creation of risk assessment techniques allows for the identification of flood hazard areas and enables the creation and distribution of this information to decision makers. technological advances will continue and a long term authorization of the mapping program is needed so we can fully utilize those advantages, continuing to improve in advance flood risk identification. fourth, improvements in floodplain management and hazard mitigation elements of the nfip should be continuously evaluated. with respect to the current discussion draft, we find that the draft developed by the subcommittee thrincludes a numb of important chains nges to the nfip. we note that these constitute revisions rather than full reform that we are discussing

and would urge that the subcommittee plan on an in-depth consideration of the significant policy and legislative recommendations for the nfip during the two to three year reauthorization period. asfpm appreciates that the proposal attempts to modify and tighten previous proposals to delay the mandatory purchase requirement of properties in areas newly mapped as floodplain. however, as a matter of principle, if the risk is known and documented it's not appropriate for the federal government to help people ignore their risk. rather than delay mandatory purchase, we prefer the subcommittee consider other methods of addressing the affordability issue. i actually grew up in east st. louis, illinois, where my father owned aa business. we lived and worked in the floodplain with no real knowledge of the risk we were at. we knew the levees were there and counted on them.

to be abruptly confronted with the significant expense of flood insurance would have been very, very hard on my family and my dad's business. but to have flood damages to our home and to the businesses that were uninsured that we could not recover from would have been devastating. there are a number of aspects in the discussion draft that asfpm agrees with, such as the proposal to use differentiated deductibles for preand post properties. the phase in of actuarial rates for certain properties is a step forward and we agree with most of the listed categories. asfpm very much supports the establishment of the technical mapping advisory committee and should be an advisory council to provide stake holder input to assist fema in improving its processes. there are a number of issues that require further consideration. while asfpm does support a more

in depth study of privatization, any such movement in this area must ensure there are continued strong incentives for comprehensive floodplain management which is one of the great strengths of the current program. further, we would like to suggest two other studies which would be an order in addition to the privatization initiatives already provided for in the draft. a study of the feasibility of group insurance for entire communities, for identified flood hazard areas or residual risk areas behind levees. secondly an economic analysis of the overall effect on taxpayer funds providing flood insurance vouchers to low income property owners. also the severe repetitive loss program is needed to assist in reducing the approximately $200 million drain on the national flood insurance fund. we urge the committee to work with fema to identify category changes to better implement this program and the use of demolish and rebuild as a mitigation

option. asfpm is grateful for the opportunity to share our thoughts with the subcommittee and hope they will be helpful as you move forward with legislation. we will glad to answer any questions and assist the subcommittee any way we can. >> thank you. we'll begin the question and answer period. i recognize myself for five minutes. ms. brown, over the past five years, fema has paid more than $2 billion in interest payments to service its debt, nearly $2 billion more to reduce it. fema still owes $17.75 billion to u.s. taxpayers, many of us asserted fema would be unlikely to repay its debt. do you foresee any scenario in which the debt can be repaid over time? and can you outline a range of public policy options for how congress might enable fema to be able to address its debt to the

u.s. treasury? >> we have looked at this issue and the bottom line is, as it currently stands, fema has been able to make principal repayments because they have experienced relatively low flood loss years. that's how they've been able to do it. it's not clear it's reasonable to expect that to continue to occur it in the future in order for fema to be able to make those payments. there's a possibility that in srn years where fema experiences higher than normal flood years that they actually could see their borrowing from treasury go up because they may have to borrow from the treasury in order to make their interest payment. there are a range of scenarios that could be taken to address this. a decision could be made to forgive the debt in order to allow the program to start on a more sound financial footing,

provided appropriate reforms are in place. there's another way to do it would be to consider, you know, a surcharge that fema could add to existing premiums to be used to pay down the debt. that raises questions of fairness. is it fair for the current and future policyholders to have to pay a surcharge to repay the debt? so there are many ways to think about it. this isn't something that we have specifically studied, but we've looked at and read a number of possible alternatives, but this is a challenge that has to be addressed in order for the program to be put on a more stable financial footing going forward. >> well gao has also suggested that operational and management issues may also limit efforts to address the nfip's financial challenges and meet the program

goals. can you highlight some of those issues for us? >> yes. in the last decade, we've identified and made recommendations to address issues surrounding the rate setting process and how that's handled. we've raised issues with the quality of the data that fema uses to do some of its rate setting. we've raised concerns about the financial management controls and the system in place. we've had findings surrounding the oversight of the wyos. we've looked at the incentive structure that fema uses to incent wios the number of policyholders in the program and expanding the risk pool. we've also, in the work that we currently have underway, we've identified a number of challenges associated with their information technology and investments that they've made in a program -- technology program

that failed that cost fema substantial sums of money. human capital management, identifying where they need people in a mechanism to make sure the program is being adequately managed during emergencies and outside of emergencies. so a full range of issues to be fully advised. >> thank you. ms. mcconkey, i might get it right sometime, given your experience in illinois, can you provide the committee with your point of view on risk-based pricing and how it should work? and also alternatives that communities can consider for mitigating flood damage. >> yes. >> or risk i should say. >> it's very important that the people who are living at risk know the risk and share -- and be part of the paying for their risk. it is, we feel, inappropriate to

externalize that risk to the rest of the taxpayers, the federal taxpayers, but we also understand that you have to gradually move towards actual rates for flood insurance and that we also need to look at a more holistic view of our at risk communities and not just consider flood insurance or just a levee to be the ultimate answer. we need to look at really having more sustainable communities which might include a retreat from -- strategic retreat from the floodplain or buying flood easements or other mitigation techniques that will really long term reduce our flood risk in the nation. >> thank you, my time is expired. recognize the ranking member gutierrez for five minutes. >> i would like to yield my time to congressman cleaver. >> thank you, ranking member gutierrez. i do have some questions.

ms. mcconkey, you're a midwesterner and grew up in the shadows of missouri. we've had unusual snowfall this winter which means that very shortly, a mixture of the me melting snow and 9 normal spring rains can and does often create flooding along illinois and missouri. we are also still in the throes of a recession. a large number of unemployed folk are living in areas that are susceptible to flooding.

do you agree that it would be difficult for many of the people just struggling to exist, who did not purchase flood insurance to have to go to a private insurer at a time like this. i mean there's a great deal of talking about the privatization. i mean, what does privatization do to people who are vulnerable like those -- you probably know some of them. is it unfair for us to think in terms of privatization as a way for them to protect their homes and property? >> actually, what we believe is that to deal with people the affordability issue should be manage a program, a program like

hud that has experience with means-tested systems so that you could -- actually i can talk pretty loud. we really think that it shouldn't be handled through the insurance mechanism to deal with the affordability. it should be through a means tested program handled by hud like you could get vouchers if you can't afford the flood insurance. you have the protection of the flood insurance without distorting the insurance aspect of the program and you have protection for individuals through -- that's irrespective if it's fema, flood insurance or if it's private. that's our solution. i don't know how the rates would change with the privatization. i can't speculate. >> it wasn't the rates as much as it is the fact that, you know, i guess to some degree it is, but i'm concerned about people who are just struggling right now to survive.

>> exactly. >> and vulnerable. but before my time expires, i'm from the missouri side. my other concern, ms. biggert, i appreciate very much you moving ahead trying to do something with regard to the flood insurance overhaul. it seems to me that there ought to be, ms. biggert asked you the question, maybe if this bill moves and i hope something moves because i think, you know, we're dealing with $18 billion problem, and the fact that we have people who are out here vulnerable. i would really hope that before september, we could come up with a bill, but that the legislation ought to address this $18 billion problem we have, and i mean, i listened carefully to

the options. none of them are extremely attractive, i might add. but we've got to do something or we'll continue to meet and talk about an $18 billion problem. i think now is the time for us to attack the problem. i don't think we ought to wait. i don't know whether fema should send options, maybe even more you didn't mention or some way, we need to begin that struggle now instead of postponing it. i yield back the balance of my time. >> thank you. i think mr. cleaver, that we really are having this hearing now because we do need to move ahead and would expect that having, maybe another hearing, but at least a markup soon.

you know, this is a draft discussion right now, but we really want to proceed. i know the study is supposed to come out in june. i think we really want to be moving ahead before then and i think maybe we'll get an update on all of what's going on as far as the study too, but it's very important that we don't let this slide. as you know, it's much harder to do it later on and get the senate engaged, which has always been a problem. well, you could say that. i now recognize mr. hurt from virginia for five minutes. >> thank you, madam chair. thank you all for being here. welcome and thank you for your obviously significant interest in this important issue. the chair woman spoke of the $18 billion debt that is accrued through this program and i have

read that the deficit, the deficit to this program annually has been $1.3 million. ms. brown, i wonder if you can talk about that deficit. is that something that's been consistent post katrina, pre-katrina? are you able to comment on that? >> i'm not. this isn't anything we've specifically looked at. >> with respect to the proposal that we're evaluating, this draft bill, can you talk about what, in real terms, the taxpayer subsidy is for this program? are you able to talk about that? >> yes, i can give a rough estimate based on the full risk rates currently charged and the estimate for the subsidized amount and the current estimate is that the subsidy basically results in those subsidized

properties paying 45, 45% of the full risk rate. if we did a rough calculation based on the current policies in force and estimate that somewhere around $1.8 billion a year is being subsidized. that's the amount lost in premiums if there was a full risk rate across the board. >> this gao, in looking at this draft bill, been able to determine what the -- what that might be reduced to if you're able to encourage the private market to come into this business? >> well, it depends on how that happens. the challenge with flood insurance has been historically, there wasn't a private market and there wasn't a private market for a number of reasons. so depending on how that was structured to bring the private market in, there are a number of things that would have to be

dealt with. if you bring the private market in and they're able to focus on the lowest risk properties, that would leave the program with a very concentrated risk pool and all the riskiest properties will be in nfip. that can potentially expose the program to greater losses, because there would be this concentrated risk. so the impact that the private market would have is really unclear until there's a better sense of kind of how that would be structured. and what role the nfip would play in that particular scenario. >> okay. obviously, one of the issues, the fundamental issue, i think, that we all have to kind of deal with, and this issue to me, is a new one. is the issue of moral hazard. obviously, i would think we all agree there are places that people should not live. under the current proposal that

we're looking at today, do you see that the moral hazard issue, that is encouraging behavior, encouraging people to do things that are not in their best interest, would that be minimized or would that be -- could that be increased by the proposal that we're looking at today? i would like an answer maybe from you ms. brown, as well as you, ms. mcconkey, if you don't mind. >> in terms of the closer premiums come to fully reflecting risk is a clearer signal to a property owner that they are living in harm's way. to the extent that the discussion draft moves those premiums in that direction, it definitely, you know, would help elevate the risk that homeowners and property owners are exposed to currently. >> ms. mcconkey? >> i don't think i could say it any better. >> thank you.

i yield back. madam chair. >> thank you, mr. hurt. i now recognize mr. cleaver for his five minutes. >> thank you, madam chair. i just have one question. i would like to yield the balance of my time to the gentle lady from new york, ms. mccarthy. i'm still on the 18 billion. there have been some suggestions that perhaps reinsurance could be a way to eliminate future debt. i would like to just get your response to that, both of you. either of you. one of you. >> the issue of reinsurance, one of the things in the discussion draft that was interesting is that, you know, there's an opportunity for fema to do some study and pilots and explore the option of reinsurance.

this is something that we have looked at a couple of years ago. there didn't appear to be an appetite at that time, but i think it's something definitely worth revisiting because the way it currently works is nfip, while it's an insurance program, it doesn't function really anything like private insurance. because private insurers would purchase reinsurance to cover that catastrophic level of risk. what happened, and we saw this happen in katrina, because to representative hurt's point, prior to katrina, the program wasn't running a deficit. it was pretty much self funding up until 2005. and treasury you became the reinsurer, because any losses over and above the amount that could be covered through premiums because there is no reserving mechanism was borrowed from the treasury. what you're left with is treasury -- the program now has this outstanding debt to the

treasury because there wasn't, you know, the opportunity for any type of reinsurance mechanism. >> i yield to ms. mccarthy. >> i thank my colleague. i also say thank you to chair woman for having this hearing. i think it's extremely important. i want to give you a little back ground. i live on long island. we have a lot of shoreline. we have a lot of homes that need flood insurance in case of a hurricane. so far, we've been blessed that we haven't had that hurricane. i represent central nassau county. fema, i'm sorry mr. fugate is not here, because i had questions i wanted to ask him. apparently what fema had done was go out to suffolk county and took those maps and put them

into nassau county. center of nassau county which they're saying on certain areas in this particular village were a little higher even though we're not near any water. i stress that, we're not near any water nor have any families had any floods for over 25 years. is there a possibility? absolutely. >> should we look at that? absolutely. i want to ask, the draft legislation contains a provision to bring back the technical mapping advisory council to address mapping standards made up of representations from many different agencies familiar with mapping. i'm interested in getting your thoughts on having the mapping process and an entire independent entity in an effort to ensure the most accurate data is used to update the maps. nassau county, long island, we had our maps updated. to give you a side bar, i have a retirement home somewhere out in

suffolk county, very close to the water. i did not get an increase. i am now not in a flood zone, and i don't understand that at all, because when it rains heavy, the water from the bay comes up basically on the lawn. so something's wrong here. if i'm i'm living there, then i should be paying more, in my opinion. i shouldn't say that, but right now i'm getting away with it. but the people in nassau county, the center, in my opinion, the maps are wrong. so i would like your opinion on bringing back the technical mapping advisory council so that we have more accurate maps. >> okay. we very much endorse the idea of the concept of bringing back the technical mapping advisory committee. actually when it was instated in 19 -- i think '94 or '95, through their recommendations

they actually brought out the map modernization program which has really led to great progress in improving the quality and the accuracy of the maps in most places. so, yes, we do believe that's an important body to have as an advisory council. through fema's risk map program, the next five-year initiative, they have taken certain very strong steps to address quality issues with the mapping. and also to have greater engagement with the community so that there is more ground truthing to what they're doing earlier on in the process. >> may i stop you right there? that was one of the biggest failures. they did not let the community know. they did not let even the counties know. they just asked them for their maps, which is very upsetting. >> and fema has addressed a lot of problems in that regard with their risk map process, where it

is very clearly prescribed to anyone who -- and actually the group that i manage, we do the digital flood insurance rate maps, we do the engineering studies for illinois county. so we have done 78 of our 102 counties. so we actually -- i'm involved in that process. i read the rules because that's what we're supposed to do, and through the risk map process they really is strong community engagement, early on technical meetings so that there is ground truthing of what you're doing and fema has also set up -- and i apologize, i may not have the right phrase, but an arbitration panel for when there are appeals to the maps. i think we have -- they have listened, they have heard about the problems and that risk map makes great strides in addressing the accuracy and the outreach issues. >> thank you. mr. brown, anything? mr. cleaver, would you like your time back? >> i think his time is expired.

>> oh, sorry. >> now recognize mr. dole for five minutes? >> thank you, madam chairman. >> from illinois. >> we're delight that you're here from illinois. obviously the chairman doctor t -- the chairwoman, the ranking member and myself are delighted to have someone else here from illinois. >> thank you for the invitation. >> ydo you have any suggestions on the repetitive loss properties and how to make them less of a liability? >> yes. this is also an issue that we have looked at over time. and while great strides were made with amendments that were made in the 2000s to address repetitive loss properties, the number of properties has continued to increase and we looked at february numbers and they're continuing to increase. there are a couple of things

that we would propose be considered that deals with mitigation offers and what happens when those offers are refused or not responded to. and in terms of allowing fema perhaps to -- to apply surcharge above a full risk rate for those properties. if the homeowner chooses to refuse or not respond to an offer. and also really focusing some attention on the mitigation programs and determining if there are ways to make them more efficient and effective as a way to address the issue of the repetitive loss properties. >> and just following up on my colleague on the other side who talked about reinsurance, you currently aren't using reinsurance right now. is that correct? i'm sorry, in the -- >> in the fema, no. >> they're not using. is there any question that you're able to -- that fema is able to use it? >> that i'm not sure about. if they could if they wanted to.

right now the mechanism is for it to -- for them to rely on borrowings from treasury. >> i mean, would perhaps additional insight or authority from congress be necessary to let them do that? it certainly is a common practice out there in the insurance industry in order to try to protect from catastrophic losses and certainly when we look at those areas that are particularly hard hit, or those that continually will be hit again and again, it would seem to me that potentially at least having that mechanism or vehicle available may be something that they might want. is that something -- what is your take? >> well, my take on whether they could do it now, this is where i really wish mr. fugate was here to dress th to address that question specifically. as far as that being an option to be considered, i think that's one of the options that needs to be on the table and discussed as

far as reforming the program going forward. >> miss mcconkey, question for you on the vouchers. you talked about vouchers before. can you give me any sort of an idea on how you anticipate or how you would like to see something like this, how it would be administered and do you have any idea what the cost of that would be? >> to answer your last question first, no, that's actually the cost of it is a study that we recommend be initiated through this draft legislation. the voucher system we envision as something to be managed through the housing and urban development because they have experienced with means tested voucher systems. fema does not. but this way it would allow for people to get the message about the risk that they have with their home and yet not be burdened in these times or because families that really are just operating on the edge would not be burdened with the cost,

that we would pick that cost up. it also provides them with fuller protection than no insurance at all. if you have insurance, then that means you've got money to pay off your mortgage. but if you're relying on disaster assistance, you are still in -- obligated for that mortgage. you really aren't covered. it provides lower income people with greater coverage. the voucher system, as we said, we believe to be means tested. that's the extent of my knowledge on that. we would have to do more research to give you a more thorough anser. >> okay. with just the short amount of time i've got left, you talked in your testimony before about -- or at least in testimony in the past about floodplain coverage going from 100 year to expanding it beyond that in terms of, you know, 250 or even a 500-year event. do you have any idea how much of the country would be covered under those instances?

>> that's something that i don't know that anybody could just estimate that without some research on it. going beyond the 100-year, looking at the 500-year would be something to consider as a residual risk area. probably you could estimate the difference between the 100 and 500-year floodplain if it was all digital. >> the gentleman's time is expired. miss capito? >> i think i'll save my questions for the second panel. thank you. >> miss mccarthy, would you like to claim your time? then we'll go to mr. palasso from mississippi. thank you for joining us. >> thank you for having me. good morning. i appreciate the courtesy provided by the house financial

services committee to allow me to participate in this morning's very important hearing. thank you, chairwoman biggert. i ask consent that my full statement be included in the record. >> without objection. >> i represent mississippi's fourth congressional district, which is the only district representing the mississippi gulf coast. fema has served as a partner to our state and we applaud administrator fugate's continued leadership to the agency. the national flood insurance program is critically important to south mississippi and any area exposed to flood risk. as floods continue to be among the most costly natural disasters in the united states, i urge the committee to closely consider reforms offered by administrator fugate to the nfip and to pass a long-term reauthorization of nfip. madam chairwoman, with your -- with the absence of administrator fugate, i would like permission to submit my questions for the record for him. >> without objection.

all members requests for questions will be put in the record. >> thank you. i would be remiss if i didn't not mention the high cost of wind insurance is a major factor preventing coastal residents from building homes and attracting new industry. i'm committed to a bipartisan effort to resolve this with the goal of providing coastal residents with needed cost reliefs and comprehensive cost coverage. i look forward to working with the financial services committee to find solutions to our problems. thank you, again, chairwoman biggert, for allowing me to be here today and i yield back. >> thank you. mr. duffy, do you have questions or we'll move to the next panel? i'd like to thank so much the witnesses. this has been a very informative and very helpful to us and thank you so much for being here. >> thank you. >> and i might -- those members

who have written questions, that will be open for 30 days for submitting questions to you for written response. and we'll now move to the next panel. >> if we can do this very quickly, i might mention that the floor is estimating that we will have votes between 11:45 and 12:15. so we do want to move as expeditiously as possible.

>> okay. if the panel can take their seats and if they know where they're sitting. all right, i'd like to introduce our second panel. we have stephen ellis on behalf of the smarter, safer coalition and vice president, taxpayers for common sense in washington,

d.c. then we have terry sullivan, chair of the committee on flood insurance, national association of realtors and owner of sullivan realty in spokane, washington. spencer houldin, chair government affairs committee and independent insurance agents and brokers of america and president of ericson insurance services in washington depot, connecticut. frank nutter, president reinsurance association of america, washington, d.c. sandra parrillo, chair of the national association of mutual insurance companies and president and ceo of providence mutual fire insurance company, warwick, rhode island. then donna jallick, on behalf of the property casualty insurance association of america and vice president flood operations.

harleysville insurance, harle harleysville, pennsylvania. and last but not least, barry rutenberg, first vice chair, chairman national association of home builders, washington, d.c. welcome to you all. as you heard, i'm sure, if you can limit your testimony to five minutes and after that we'll have the question and answers. so mr. ellis, if you would like to begin for five minutes, you're recognized. >> thank you. good morning, chairman biggert, ranking member gutierrez, members of the subcommittee, i am steve ellis, vice president of taxpayers for common sense, a national nonpartisan budget watchdog. thank you for inviting me here today to testify, but i'd also like to recognize the people who are affected by the tsunami and also how it accentuates the importance of fema and the national flood insurance program flooding. taxpayers for common sense hassed avoluntahas

ed av advocated for reform of the nfip. all have recognized nfip is flawed and must be reformed. the question is how. any reauthorization of national flood insurance program must make significant changes to put it on sounder financial footing with more sound rates and accurate maps. the discussion draft of reform legislation being circulated by the committee is a good start. it responsibly tackles rate and subsidy issues, creates a mechanism to increase confidence and accuracy in flood mapping and doesn't stick tax payers with the tab of bailing out a failed program. but we're concerned with provisions that could inhibit adoption of updated maps, add a new business line to the program and mandate annual coverage, limit increases that will insure the program's increases every year. we look to making this good start and even better final product. tcs is allied with smartersafer.org.

the depth and breadth of the coalition, some which of are at this table, underscores the importance of reforming nfip. i would like to submit for the record smartersafer.org's principles for reform. >> without objection. >> but to summarize quickly and clearly, those principles are maps are accurate and up to date, they're risk based rates, any subsidies should be explicit and targeted to those who truly need them and encourage mitigation as a tool to reduce risks. taxpayers for common sense endorses those basic principles to better protect people, property, the environment and the taxpayer. i would like to talk about the flood insurance and the draft legislation for the taxpayer perspective. nfip does not charge truly actuarially sound rates. the program's goal is to find as charging premiums that would generate enough revenue to cover historical average loss year. that means catastrophic loss years are left out of the equation. the program covers any fiscal short falls by borrowing from the u.s. treasury which is the

signature subsidy of itself since the loans are virtually interest free. the program contains enormous cross subsidy as well. the draft legislation will provide a mechanism to move towards more actuarially sound rates. responsible both for the homeowner and the program. the legislation also stipulates that most properties have their rates increased by 20% annually until they're paying the estimated risk premium rate. in addition, the draft legislation directs its subsidies not be available to lapse properties. lapsed policies. these changes move the program in the right direction. what appears to be remain uncharged are subsidies to free firm and repetitive loss properties that do not meet the specific criterias. these properties have been su i subsidized for decades.

flood maps must be up to date, accurate, and based on the best available science. we support the flood mapping advisory council to develop new standards for flood insurance rate maps that will incorporate true risk, be graduated and reflect realities on the ground, both man made and natural. the direction that fema -- that implement the new protocols is also critical. the council and the development of new mapping standards should not and will not delay the ongoing fema map modernization efforts. that program is critical to the long-term fiscal viability of the program. we appreciate that unlike previous legislation, the bill does not automatically delay the implementation of new maps. the draft legislation could delay or undercut new maps by giving the administrator authority to suspend flood insurance purchase requirements. insulating people from the changes related to the maps on paper does not change the geological realities. their property is at risk. there are some troubling expansions in the draft. one is the creation of the new

insurance product for business interruption of the loss of personal residence. another loss of use of personal residence. another would enable coverage limits to increase by some inflationary measure. with the flood insurance program so heavily in debt it doesn't make sense to expand the coverage provided. tcs supports the privatization study called for in the legislation and calls fema to pursue the initiatives. also, fema should be authorized to develop a catastrophic reserving. communities and individuals should be helped to reduce their flood vulnerability. on balance, the draft legislation is a good step forward to reform the troubled flood insurance program. we look forward to working with the committee and congress to move the program in the right direction and off the backs of taxpayers. thank you. >> thank you very much. mr. sullivan, you're recognized for five minutes. could you turn on the mike? thank you. it should show green. yes. >> good morning, chairwoman biggert and ranking member g

gutierrez and subcommittee members. my name is terry sullivan, i'm the designated broker of sullivan realty in spokane, washington. i've been active with the national association of realtor s for 17, the last 17 years of my 40-year career as a realtor. currently i serve as chair of nar's land use committee. i'm honored to represent the views of more than 1.1 million realtors engaged in all aspects of residential and commercial real estate. as you know, flooding claims more lives and property than any other natural disaster in the united states. it happens anywhere. along rivers where snow melts or rain falls as well as the coastlines. without the national flood insurance program, 5.6 million home and business owners across the u.s. would not have access to the affordable flood insurance.

since the year 2000, the program has averted $16 billion in property loss in the 21,000 communities where flood insurance is required. in short, the program saves taxpayers money. chairwoman biggert, thank you for your leadership and for drafting the legislation to reauthorize the nfip for five years. this would end the current stopgap approach that has had -- led to nine extensions and five lapses in the program since 2008. a five-year reauthorization would provide needed certainty for the real estate markets to recover from the longest recession since the great depression. the many extensions and shutdowns have immeasurably undermined real estate investor confidence. just one of the lapses delayed or canceled more than 47,000 home sales in june of 2010

alone. we are pleased to see the bill would add coverage options for business interruption, loss of residential use. coverage which has not been updated since 1994 would be indexed for inflation. finally, the bill would ensure that repetitive loss properties have an insurance rate that reflects their loss history, a provision we strongly support. all of these reforms will encourage participation, increase the funds for nfip, help property owners recover from flooding and decrease future federal assistance when underinsured properties suffer flood loss. while we understand the need for tough reforms to strengthen the program long-term, we remain deeply concerned about provisions to return to a time when taxpayers relied on private insurers to administer the program. it didn't work then. it won't work now.

madam chair, this is hud's federal register notice from 1977. it provides the history of nfip and how we got to the government program we have today. with your permission, i would like to have it included in the record with my written statement. nar is strongly opposed to the private risk initiative or bills including hr-435 to end the nfip. >> without objection. >> thank you. the bottom line is the private market will charge too much. today the four companies that write only 200,000 private policies would have to ramp up by 3,000% to the nfip's 5.6 million current policies. the private insurance market simply cannot guarantee either affordability or availability of flood insurance. in conclusion, nar believes that congress should reform the

program, not end it. once again, on behalf of the entire membership of the national association of realtors, thank you for providing us this opportunity to share our views on a vital program and i look forward to answering any questions you may have. >> thank you very much. now mr. houldin? >> mr. houldin. good morning. my name is spencer houldin, i'm pleased to be here today on behalf the independence insurance agents and brokers of america, known as the big i, to present our association's perspective on extension and reform of the nfip. i'm the president of ericson insurance, the second generation insurance agency with offices in connecticut, and new york. since 2008, i've served as chairman of the government affairs committee for the big i and have represented the state of connecticut on the big i bord since 2006. the big i is the nation's oldest and largest trade organization and association of independent

insurance agents and brokers, we represent a national network of more than 300,000 agents, brokers and employees. many of these agents serve as a sales force for nfip working with the rate your own companies. we understand the capabilities and challenges of the insurance market when it comes to insuring against flood risks. we think this hearing is especially timely in light of severe storms and flooding in the northeast and this morning on the west coast. in fact, my firm fielded nearly 75 calls this week when clients experienced water in their homes up in connecticut. we commend the subcommittee for looking at this very important issue. the big i believes that the nfip provides a vital service to people and places that have been hit hard by natural disaster. the private insurance industry has been and continues to be largely unable to underwrite flood insurance because of catastrophic nature of the losses. therefore the nfip is virtually only way for people to protect against the loss of their home

or business due to flood damage. prior to the introduction of this program in 1968, the only financial remedy available to consumers was flooding disaster assistance. since then, the nfip has filled the private market void and created a reliable safety net. it is also important to note that for two decades up until the 2005 hurricane season, the nfip was self-supporting. with that said, we do recognize the program is far from perfect and calls for congress to shore up its financial situation. for this reason, the big i is very encouraged by chairman biggert's draft legislation, the flood insurance reform act of 2011. in the past, the big i released a 12 point plan to modernize the flood program and we're happy see a number of the recommendations have been incorporated. the first is a long-term reauthorization which we strongly support. as you know in recent years congress relied on numerous short-term extensions. last year alone the nfip expired on three separate occasions, only to be retroactively extended by congress each timing.

while the big i is grateful for the action, we strongly believe long-term extension is critical to provide marketplace stability. additionally for many years the big i asked congress to begin phasing out subsidies found in the program. we're pleased chairman biggert's draft legislation addresses this. the big i welcomes and supports chairman biggert's ideas on subsidies for commercial building, second and vacation homes, homes experiencing significant damage or improvements and homes sold to new owners. the big i welcomes the draft legislation's proposal to increase the amount fema can raise premiums at any given year. currently fema can only increase the premium of maximum of 10% on a property. the draft legislation would propose to increase this to 20%, which will allow the program to move even more properties towards actualial rates. the big i is also pleased that the draft legislation has chosen to modernize nfip by increasing maximum coverage limits by indexing them for inflation and by allowing fema to offer the

purchase of business interruption and additional living expense coverage. the inclusion of optional business interruption coverage is particularly important to big i members and their commercial clients because it reimburses them for lost income through their inability to operate due to flood loss. as i speak, we have a popular rib restaurant in my town shut down since monday. their property was flooded as was the road in front of their business. their losing thousands of dollars a day in revenue but normal expenses, payroll and mortgage, continue. it is an insurable loss today and one detrimental to a small business. with another two inches of rain last night, there is a good chance they won't be open for another week. the big i also supports strongly the option for a consumer to purchase additional living expense. if their home is not inhabitable due to a flood loss, they need funds for additional arrangements. the big i is pleased that the subcommittee is conducting today's hearing and appreciative of the opportunity to testify. adopting the reforms found in a

draft legislation would help make the nfip more sound and more effective at serving both consumers and taxpayers. thank you. >> thank you, mr. houldin. mr. nutter, you're recognized for five minutes. >> thank you, madam chair. my name is frank nutter, president of the reinsurance association of america. reinsurance is critical to insurers and state-based property insurance programs to manage the costs of natural catastrophe risk. it is a risk management tool for insurance companies to improve their capacity and their financial performance and enhance financial security and reduce the financial volatility. it can serve the same function for the national flood insurance program. as a currently operates, the nfip is not an insurance program, but it should be and it can be. the full application of risk-based rates and appropriate risk-bearing role for the private reinsurance secretary work transform the program. by doing so, the nfip could also achieve the goel of protecting taxpayers and the treasury. it is a commonly held belief that a role in the nfip is

unachievable. on behalf 6 our community, we would challenge that suggestion. we commend the chair's discussion draft regarding the protecting tax payers with risk-based rates. the rates were introduced early in the program as an inducement for communities to come into the program and it was a successful strategy. but the number of subsidized properties hasriesen risen in years. the rates have facilitated the development of coastal areas including those at high risk to flood loss and compromised the use of the natural floodplain to mitigate damage. repetitive loss properties acording to the gao account for 1% of the policies, but 25% to 30% of the losses. in addition caps on rates may be popular with ben officialries but the caps distort risk assessment by builders, local officials, property buyers and policy holders. they increase across subsidy from low or no risk persons and tax payers to those living in high floodplain -- high risk

flood areas. we commend the draft in this regard. the nfip should plan for extreme events but does not. fema represents 75% of its policies a policies are actuarially sound. it does not incorporate a catastrophe factor for severe loss years but relies on the average annual loss model for its pricing. this pricing model is ill suited for natural catastrophe risk, whether in the private or public sector. because of the pricing model, the nfip has neither adequately planned for nor priced for extreme event years. the gao points out the program should operate like an insurance entity, if it did, it could reduce or eliminate taxpayer exposure to future debt by laying off risks to the private sector through reinsurance and catastrophe bonds. the private sector role in the program now is appropriate and it relates to the right your own program, which provided the nfip with a valuable marketing arm and administrative capability.

for a variety of reasons, a private insurance market for flood risk has not developed. we believe, however, that a private reinsurance risk bearing role for the nfip can be established. and that the nfip can address its volatility and extreme event of any exposure and decrease the dependence. both financial sectors have significant capacity and believe flood risks can be reinsured or transferred. such a transfer introduces a private sector rating verification model into the nfip, providing incentive and guide post for risk-based rates. we offered two approaches to do this. the first is a traditional transactional reinsurance approach. as with most state property insurance plans, fair plans and wind storm pools, nearly all private insurers address their volatility through the purchase of reinsurance. as with these other governmental entities and private sector insurers, the nfip would work with modelers, underwriters, brokers to provide the market with risk portfolio, determine

what types of risks are aminable and seek coverage in the private sector. should the nfip find the bids unattractive, it would not go forward with the placement. the nfip therefore would be in the same place as it is now dependent on public debt. if the placement were successable, private sector would provide financial relief to taxpayers. as is reflected in the discussion draft, no study is necessary to evaluate this alternative, but can be pursued at this time with the full opportunity to evaluate proposals. the second option that we have highlighted exists in the current draft and that is the reauthorization of reinsurance pool. section 4011 adopted in 1968 provides for the director of fema to encourage and arrange for appropriate financial participation and risk bearing by insurance companies to assist insurers on a voluntary basis for the purpose of assuming on such terms as may be agreed upon financial responsibility as will

enable such surers with assistance to assume a reasonable portion. the provisions of the statute authorizing the pool have long been dormant. but they remain a viable mechanism for the creation of another pool, this time to reinsure the national flood insurance program capitalized by the surers that wish to provide capacity. the director in those participating insurers would enter into negotiations and could subscribe capacity on an annual basis. this proposal does not change the right your own program, fema remains the insurer, flood risk at the consumer level, but transfers flood risk from taxpayers to the private sector and allows those insurers that wish to participate to do so through a standing facility. these two approaches, a traditional property catastrophe insurance program and/or the reauthorization of the standing facility, are both complementary and not exclusive to each other. the existing statutory authority may well be sufficient to move forward without delay.

with look forward to working with the committee and the congress and reform of the flood insurance program and the reintroduction of a private sector reinsurance role in t thank you. >> thank you very much. miss parrillo, you're recognized for five minutes. >> thank you. good morning, chairman biggert, member gutierrez, and members of the subcommittee. thank you for the opportunity to speak here today. my name is sandy parrillo, president and chief executive officer of the providence mutual fire insurance company, one of our nation's oldest insurance companies. we began as a small fire insurance mutual in 1800 and today provide personal commercial shurinsurance protec to policy holders in new england, new york and new jersey. the providence mutual employs approximately 75 individuals, represented by more than 300 independent agents and is based in warwick, rhode island. i'm here as chairman of the national association of mutual insurance companies to present our views on the national flood

insurance program. we represent insurance companies ranging from small farm mutuals to state and regional insurance carriers to large national writers. members serve the insurance needs of millions of consumers and businesses and every town and city across america. collectively, namic members cover more than 50% of all homes in the country. i would like to begin by thanking the committee for its hard work on producing a discussion draft of proposed reform legislation. we are encouraged that the draft reflects the input of many of the relevant stake holders and has the stated goal of protecting taxpayers and policyholders. it is our opinion that the nfip is in serious need reef form and in order to achieve this goal, we believe the best option is optimizing the current framework by implementing significant reforms that address the existing weaknesses. the programs' flaws are significant. subsidized premiums have been charged on a nonactuarial basis.

in addition, the tax uprates for those in need of coverage remain low. under 30% of those that need flood insurance purchase it. the nfip was created in 1968 because of the absence of a viable private flood insurance market. the unconventional nature of flooding makes it virtually impossible to pull risk among the large enough population for private insurers to be able to offer a viable and affordable insurance product. the public private partnership that eventually merged between the federal government and the right your own companies has the potential to offer an answer. we believe that with the right mix of reforms, the program can begin to address the problems of adverse selection, moral hazard, and financial instability that has plagued it in the past. we recommend a package of key reforms designed to achieve five essential objectives. to charge sound rates. the nfip must begin charging risk based rates if it is to have any chance of being a

solvent program. these rates should reflect the true cost of providing coverage. under the current structure there is no chance the program will ever repay the sizable debt it accumulated in 2005. we recognize that the move to actuarially sound rates is painful due to the premiums charged in some instances. those property owners that need assistance, flood vouchers may be offered on a means tested basis to help mitigate the cost. however, any subsidies that the government believes are necessary must be independent of the nfip and fully transparent. subsidies cannot continue toible hidden within the insurance mechanism and homeowners should fully aware of the real risks and costs of where they live. second, update and improve the accuracy of flood maps. flood maps must be updated based on the best available science with the goal of insuring that nfip flood maps accurately reflect the risks caused by flooding. putting off the adoption of upgated flood maps does a

disservice to the citizens, property owners, rescue workers, and land development officials living and working in flood prone areas who in the end risk losing their homes and their lives. we recommend adopting a nonpolitical balanced and incredible process for updating the maps. third, to improve the takeup rates. insurance is dependent upon the large numbers, thus the insurance mechanism works best and is the most affordable when everyone participates in the program. currently only 20 to 30% of individuals exposed to flood hazards actually purchase insurance. the program must take steps to increase these numbers dramatically in order to properly pool the flood risk and achieve financial soundness. fourth, discourage competitive loss properties a cording to the cbo, there are 71,000 nfip insured repetitive loss properties which represent just 1.2% of the nfip portfolio, but account for 25% to 30% of the

total claims paid between 1978 and 2008. something must be done to deal with this issue. quite simply, american taxpayers should not be forced to subsidize a small subset of nfip policy holders who continue to rebuild in high risk areas. finally, improve the management and correct operational inefficiencies. the nfip must have quality information regarding its policy holders if it is to operate efficiently. we must develop an institute clear procedures for monitoring contract and claims records effectively communicating with lenders and triggering enforcement actions for noncompliance with mandatory purchase requirements. we believe these reforms are necessary and achievable. i have included more detail policy proposals for each of our five key objectives in my written testimony and as the process moves forward, we stand ready to work with the subcommittee to address the insufficiencies in the current program. again, thank you for the opportunity to speak here today. >> thank you. and miss jallick, you're

recognized for five minutes. >> thank you chairman biggert, ranking member gutierrez -- >> i think you need to turn on the mike or move it closer. >> thank you. thank you. thank you for the excellent draft legislation on flood reform. the proposed changes address many of the major flaws and the current program. thank you, also, for considering it in a timely fashion. 5.6 million people depend on this program to protect their homes and businesses. and thank you for the bipartisan leadership you have demonstrated on flood reform over the last several years. my name is donna jallick, i am the vice president of flood operations for harleysville insurance, one of the largest write your own flood insurance private partners. harleysville is also a member of the property casualty insurers association of america and a write your own flood insurance coalition. i have been working with the federal flood program for 15

years. last year congress allowed the nfip to expire four times for a total of 53 days. and there have been ten short-term extensions in less than three years. lapses hurt consumers. millions of real estate professionals and our business. private write your own insurers have been leaving the program in droves and in part because of the lack of stability in the program and the confusion for consumers. when the program lapses, ensurers have to decide whether to keep collecting flood premiums and whether we can afford to put our name behind a program that may or may not be continued in the same form by congress. it creates significant liability and vulnerabilities for all stake holders. the lack of program stability also makes it difficult to administer the program and to

explain it to consumers. our disconcerning message must be buy flood insurance because we think the program will be renewed, and we have a guess as to what we think the rates might be when it gets extended retroactively. we already require agents to spend months training to understand and explain the nfip to consumers. lapses and short-term extensions increase this expense. five years is a good proposed extension. the available amount of protection for consumers under the flood program has not been increased for 17 years. the draft would index flood coverage for inflation. that's a good start. federal flood rates, which are currently a fraction of what the private market would consider, even for low risk properties,

would be appropriately increased under the draft legislation. rates for coverage and many high loss and environmentally sensitive areas would be particularly increased closer to expected loss cost. this approach still leaves a government subsidy, but is a very good start towards reducing that subsidy and it is a proposal that we strongly support. we also applaud the proposal to consumers by adding living expenses and business interruption to the available coverage. people forced from their homes need immediate cash for shelter. the proposal makes federal flood coverage more closely mirror private coverages that protect individuals and business consumers and help them move forward quickly. just as important as the good provisions in the bill is streamlined operations.

the number of private insurance partners serving consumers in the flood program has dropped from 150 to 70 that are actively writing flood insurance over the last six years. while harleysville worked very hard to provide our policyholders with affordable protection, for many insurers, program revenues have been outweighed by growing administrative costs. they are leaving the nfip. the draft does not add too many additional requirements to the nfip. please keep the bill streamlined to insure the program will remain standing. thank you for the bipartisan committee draft which addresses the critical vulnerabilities in the nfip and will greatly strengthen flood protection for millions of consumers. the write your own flood partners support you and hope that you will be able to keep a

straightforward bill with long-term extension and no further lapses. harleysville and pci stand ready to be of any assistance desired. >> thank you. we recognize mr. rutenberg for five minutes. >> chairman biggert, ranking member gutierrez, members of the subcommittee, thank you for the opportunity to testify today. my name is barry rutenberg, and i'm a home builders from gainsville, florida and first vice chairman of the board of directors of the national association of home builders. nahb commends the subcommittee for addressing reform the nfip program. builders strongly support a five-year program reauthorization as a best way to provide a steady foundation on which to build program revisions and ensure that nfip is efficient and effective. for several years nfip short-term extensions created a high level of uncertainty in the program causing severe problems in already troubled housing

markets. during the periods, there were delays or canceled closings due to the inability to obtain flood insurance for mortgages. often new home construction was shut down or postponed due to the lack of flood insurance approval. adding unneeded delays and job losses. we believe this reauthorization will ensure the nation's real estate markets operate smoothly and without delay. the availability and affordability of flood insurance gives local governments the ability to plan and zone their communities including flood flans. this allows homeowners the opportunity to live in a home location of their choice, even when the home lies in or near a floodplain. home builders depend on the nfip to be annually predictable, universally available and fiscally viable. the nfip creates a strong partnership with states and localities by requiring them to enact and enforce floodplain management measures including building requirements designed to ensure occupant safety and reduce future flood damage.

the partnership depends upon the availability of up to date flood maps and financially stable federal component and allows local communities direct developments. unfortunately the losses and devastations suffered with the 2004 and 2005 hurricanes and the 2008 midwest floods has severely taxed and threatened the involven sy of the nfip. while these have exposed shortcomi shortcomings, we believe reforms must not be an overreaction to the historic circumstances. the nfip is not just about flood insurance premium and payouts. it is a broad program that guides future development and mitigates future losses. the financially stable nfip is in all of our interests and congress' efforts have the potential to greatly impact housing affordability and the ability of local communities to control their growth and development options. a key tool in the nfip's implementation, rate maps or firms, have been recognized by congress to be inaccurate and

out of date. fema has been successful in digitizing mauve of the firms, but many are not using the updated data. because of this large discrepancies remain. we believe continued congressional oversight is necessary. we commend the proposal to establish the technical mapping advisory council and hope it will foster more collaboration. beyond fixing the maps, nfip supports increasing coverage limits and offering various insurance options for consumers and even a possible minimum deductible increase. the nfip must continue to allow state and local governments, not the federal government, to dictate local land use policies and make decisions on how private property may be used. fema must also better coordinate its activities with other federal agencies who have oversight of other federal programs. in my written statement, i discuss fema's recent requirements of compliance for certain property owners. additionally, before any reforms are enacted to change the

numbers, location or types of structures required to be covered by flood insurance, fema should first demonstrate that the resulting impacts on property owners, communities, and local land use are more than offset by the increased premiums generated and hazard mitigation steps taken. nfip urges congress to ensure construction requirements remain tight to the 100 year standard. should congress change the hazard area from 100 years to 250 years, it would require more homeowners to purchase flood insurance and would impose mandatory construction requirements that increase costs and impact resale values. significantly. this would also affect fema by requiring modifications to ordinances and policies all at a time when fema has admitted its lack of resources to provide current services. i thank you for today. nahb looks forward to working with this committee on this valuable program. >> thank you so much.

unfortunately, if you look at the clock, and you see those two white dots up there, that means we have votes and we have got about seven minutes left for voting. so and these floor votes may take 45 minutes to an hour depending on how long it will be, but we do want to have the opportunity to ask questions and i hope all the members will come back briefly. so the subcommittee stands in recess and we'll convene immediately following the floor votes.

[captions copyright national cable satellite corp. 2011] [captioning performed by national captioning institute] >> coming up, president obama at today's white house news briefing. opponents of muammar gaddafi -- call on their budget the u.s. house debates ending a home mortgage assistance program. at this white house news conference, president obama said the u.s. is prepared to use its strategic petroleum reserves its oil supplies are disrupted by events in the middle east. the president also talked about u.s. efforts to respond to the earthquake in tsunami in japan. this is about 50 minutes.

>> good morning, everybody. before i begin, i want to say a few words about the earthquake and tsunami that struck japan earlier today. our thoughts and prayers are with the people of japan. this is potentially a catastrophic disaster, and the images of destruction are simply are breaking. japan is, of course, one of our strongest and closest allies, and this morning, i spoke with prime minister kan. on behalf of the american people, i conveyed our deepest condolences. we currently have an aircraft carrier in japan and another is on its way. we also have a ship en route to assist as needed.

the defense department is working to account for all our personnel in japan. the state department is working to account for and assist any and all american citizens in the area. tsunami warnings have been issued across the pacific. we have seen waves come ashore in alaska and hawaii, as well as on the west coast. we are taking this very seriously. we are monitoring the situation closely. fema is fully activated and is coordinating to support these regions as necessary. let me stress -- if people are told to evacuate, do as you are told. today's events reminded us of

how fragile life can be. our hearts go out to those who recover and rebuild from this tragedy. let me say a few words about something on the minds of many americans, and that is the price of gasoline. in an economy that relies on oil, the price is affecting everyone. from farmers and truck drivers to restaurant owners and consumers. businesses see the rise in prices affect their bottom line. families flinch every time they fill up the tank. of course, rising prices are not a new phenomenon. three years ago, before the recession hit, a combination of factors, including rising gas prices from emerging economies like china, drove prices to over

$4 a gallon. there was a worldwide recession and a decrease in demand that pushed prices back down. over the past year, global demand for oil has increased. turmoil in north africa and the middle east has added uncertainty to the next. here is the good news. the global community can manage to supply disruption. the global community is committed to filling in gaps. we will work closely with international partners to keep all options on the table when it comes to any supply disruptions. should the situation demanded, we are prepared to release the significant amount of oil we have in the strategic petroleum reserve. we have resources to monitor

any possible manipulation in the oil markets. i am asking state agencies to work with their state's attorney general to make sure no one is taking advantage of families at the pump. in addition, we are more prepared than we used to be. our economy as a whole is more efficient. we are adapting. we are producing more oil and we are importing less. our automakers are manufacturing more fuel-efficient cars. some get more than 50 miles to a gallon. and our consumers are buying more of these cars. democrats and republicans came together to pass a fuel tax cut that is already helping to grow our economy and create jobs.

in the wake of rising gas prices, it should also help to act as a cushion for working families. it is our mission to do everything we can to get gas prices down. that gas tax will save $1,000 for every american family this year. that tax relief package is a key reason that even with the prices, economists and investors like warren buffet believe we should still expect solid growth and job creation this year. now, the hard truth is, as long as our economy depends on foreign oil, we will be subject to price runs. so, we have got to get moving on a comprehensive energy strategy that improves production and energy conservation, and increase our access to energy supplies in the near term.

we have to make our economy more energy independent over the long run. we need to continue to boost domestic production of oil and gas. last year, we reached our highest level since 2003. let me repeat that. our oil production reached its highest level in seven years. but the production from federal waters in the gulf of mexico reached an all-time high. for the first time in a decade, imports accounted for less than half of what we consumed. we are encouraging offshore exploration and production. it is responsible. we are only a few months removed from the worst oil spill in our history.

what we have done is put in place, and place -- common sense standards. oil companies are stepping up to improvement 35 new offshore oil permits that meet these new standards. there is more we can do, however. for example, the industry holds leases on tens of millions of acres were they are not producing a thing. i have selected the interior department to determine how many leases are going undeveloped and report back to me in two weeks so we can encourage these companies to produce american energy. people deserve to know that their resources are being developed in a timely manner. we are working with industry to explore new frontiers, safety

measures, and canteen and technology. we are looking at new development in alaska, onshore and offshore. we are strengthening our key energy relationships with other nations, something i will discuss the the president of brazil next week. positive actions can increase domestic oil production in the short and medium-term. but it is not a long-term solution. even if we started drilling new wells tomorrow, that oil is not coming on line overnight. even if we tap every reserve available to us, we cannot avoid the fact that we only control 2% of the world's oil but we consume over a fifth of the world's oil. t. boone pickens made a fortune in the oil business and he could not be considered an enemy of oil drilling.

but even he said that this is one problem cannot drill our way out of. especially resources hon. to hurricanes, war, and political turmoil. if we want to secure our long term prosperity and protect the american people from more severe blow shot in the future, the way to do it is to reduce demand into everything we can to break our dependence on oil. for example, last year, we established a groundbreaking national fuel-efficient see standards for cars and trucks. it saves money often serving 1.8 billion barrels of oil. we are working with workers in states to ensure that the fuel- efficient cars of tomorrow are

built in united states of america. to satisfy broader energy needs, we're looking to diversify our entire portfolio. right now, all across america, we are producing homegrown feels. our scientists are looking for the next breakthroughs. and our workers are in factories, manufacturing advanced batteries that will help power our cars hundreds of miles to the gallon. these are jobs that did not exist two years ago. we want to create more of these jobs. i set a goal for america. by 2035, we need a clearer, broader array of fuel resources. so, these are just some of the steps we have already taken. over the course of the weeks and months ahead, we will take

more. the bottom line is this -- we have been having this conversation for nearly four decades now. every few years, gas prices go up. politicians pullout the same old political playbook and nothing changes. when prices go back down, we slip back into a trance, and when prices go back up, suddenly we are shocked. i think people are tired of that. they are tired of talk. we have got to work together. democrats, republicans, and everybody in between. i do not want to leave this for the next president or for our kids. with that, let me take a few questions. i am going to start with you. >> thank you, mr. president. let's start with libya. you said you want to see gaddafi leave power, leave office.

are you prepared to use any means necessary to make that happen? if not, why not? somew i'm in the case of of these other uprisings, there is careful consideration not to take sides, to let the people in those countries take those decisions. so, what is the red line? >> my first priority has to be the american citizens and embassy personnel. we got that the very next day. the day after that, we imposed sanctions and mobilize the international community so that across the board, we are slowly tightening the noose on gaddafi. he is more and more isolated internationally. in addition to that, we have

implemented a host of humanitarian aid measures. we will continue to do that. and, what we have done is we have organized a series of conversations about a wide range of options the can say. everything from 24-hour surveillance so we can monitor conditions on the ground and react rapidly to further efforts with an arms embargo. nato will be meeting on tuesday. we have been in discussions with arab countries as well as african countries to engage their support for such an

action. in addition, secretary clinton will be meeting with the opposition in the next several days. we have determined it is important to assign a representative whose job it is to interact and determine further ways we can help them. we will be in conversation with them. nothing is off the table at this point. it is important for us to react about as swiftly as an international coalition has ever moved to impose sanctions on gaddafi. i am absolutely clear it is in the interest of the united states and the libyan people for mr. gaddafi to leave. i'm not opposed to these options. now, i do take very seriously making sure that any decisions i make that involve military

power are thought through and are done in close consultation with secretary gates, the chairman of the joint chiefs of staff, and all relevant personnel. any time i send united states forces into a potentially hostile situation, there is risk. there are consequences. it is also important from a political perspective to, as much as possible maintain the strong international coalition have right now. >> you impose all the sanctions. he thinks that there is no other option, but to keep fighting. he may have the power to potentially when the standoff with the rebels.

>> i think that is why it is so important for us to continue to add additional pressure. including sending a clear message to those around gaddafi that we are paying attention and we will go to the international criminal court. part of what we want to do is to change the balance not just inside of libya, but the balance around libya and the thinking about the prospects about the course that they are on. i am concerned about it. gaddafi has a stash of weapons. he has some troops remain loyal to him, but he has also been hiring mercenaries, even with

the financial freeze he has assets. we are going to have to continue to apply pressure. that is why i say we have not taken any options off the table at this point. >> thank you, mr. president. just to follow up -- you say you are concerned -- is gaddafi ever an acceptable option for you? their have been discussions about the leadership negotiations. given that, how do you stand on the three-week spr? >> sure. going back to the good of the question, as i said before, the united states is determined that gaddafi should leave.

we are going to do a wide range of actions to try to bring that about. it is never acceptable. i think what you are asking is -- are we going to engage in any potential military action to make that happen? as i said before, when it comes to u.s. military action, you have to balance cost versus benefits. i do not take those decisions lightly. but the be as clear as i can about the desired outcome from our perspective. that is for gaddafi to step down. we will work with the international community to try to achieve that, and we will be

in close consultation with these opposition groups to see how we bring about this outcome. with respect to the budget, i think it is important to understand that right now, the discussion -- we are talking about how to fund the remainder of this fiscal year. this is an appropriations task. we've been in close contact with all members of congress, both parties. i have conversations with mr. mcconnell. i have had conversations with mr. boehner. i have had conversations with harry reid about how they should approach this budget problem. here is what we know. republicans in the house passed a resolution that has been rejected in the senate. they are not going to get 100% of what they want. the democrats have put forward

spending cuts that are pretty painful to give republicans already have of what they are seeking. many of those cuts are ones that were embodied in the budget i proposed for 2012. here is what we know. both sides are going to have to sit down and compromise on prudent cuts somewhere between what the republicans were seeking that has been rejected, and what the democrats have rejected. it should not be that complicated. every day i talked to my team. i give them instructions. in terms of how the participate in the negotiations, to indicate what is acceptable, what is not acceptable. we should be able to get this completed.

because neither democrats nor republicans will compromise until their 100% position is voted down in the senate, we have probably lost some time. we will probably not meet next week's deadline. which means we may have one more short-term extension. let me just make one more point about this. first, we cannot keep running the government based on the by- week extension. we have a war in afghanistan going on. we have a wide range of issues. and the notion that we can do last year's budget with sensible, but prudent spending

cuts, i think, defies common sense. i think we should get it done. point two -- there will be certain things house republicans want, but i will not accept. the reason i will not accept them is not because i do not think we have to cut the budget. we do. we have already put forward significant cuts in discretionary budget, some of which have not made members of my own party happy. but the notion that you would cut pell grants when we know the single most important thing to our success as a nation is how educated our kids are, and the proposal this year would cut $800 out of pell grants for 8 million kids.

that makes no sense. the notion that we would decide that under the republican budget proposal to eliminate 200,000 slots in headstart, that would mean the layoffs of 55,000 teachers. that does not make sense. the principle i have tried to put forward since the state of the union is we have to live within our means, we have to be serious about managing our budget, but we cannot stop investing in our people, in research and development, infrastructure, the things that will make as competitive over the long term and help with the future. i communicated directly to speaker boehner, as well as to republican leader mcconnell that we want to work with them

to get to a sustainable discretionary budget. and the think it is important for us to stop funding programs that cannot work. we will have to make sure we hold the line and comes to these critical programs that are either going to help us out-educate, out-innovate, or out-build other countries. one last point on the budget. the republican budget passed out of the house included are range of what are called "riders." these are not really budget items. these are political. i made it clear to speaker boehner that we're happy to discuss any of these riders, but my general view is, let's not sneak these into a budget debate.

if republicans are interested in social issues they want to promote, they should put a bill on the floor of the house. promote it. send it to the senate. but do not try to use the budget as a way to promote political or ideological motives. that is the american people's view as well. one of the messages the american people have sent is, get serious about living within our means, managing the budget in a responsible way. stop the political bickering. if we have that in mind, i think that not only can get this short-term issue resolved, but i think we can actually solve the long-term budget issues as well. i will take another one. >> thank you.

experts say they cannot recall a time when they have had to rush to assist in nuclear power plant in another country before. what can you tell us about how serious this is in japan? second question p.j. crowley of the state department said that the treatment of bradley manning by the pentagon was ridiculous and counterproductive and stupid. i am wondering if you agree with that. thank you. >> on point number one, i spoke with prime minister kan and specifically asked him about the vulnerability of nuclear plants in response to the earthquake. he indicated they are monitoring the situation closely. so far they have not seen evidence, but they have to take all precautions.

we are in close contact with their personnel to provide any assistance if necessary, but also to make sure that if in fact there are breaches in the safety system on these nuclear plants that they are dealt with right away. with respect to private manning, i have asked the pentagon whether or not the procedures regarding his confinement are appropriate in meeting our basic standards. they assure me they are. i cannot go into details about some of their concerns. some of this has to do with private manning's safety as well. >> [unintelligible] >> i think i gave you an answer to the substantive issue. >> [unintelligible] >> i do not have all the

details. i have to defer that. this only happened a few hours ago. there has to be a lot of fact finding to determine. >> in an interview with abc news, the doubt the's son said said the plan was to squash the rebels without mercy. if the plan of the united states is to stand by and do nothing -- and they say that because any past you have said the united states has some moral obligation to intervene militarily. >> i believe that not only the united states, but the international community has an obligation to do what it can to

prevent a repeat of something like what occurred in the balkans, what occurred in rwanda. part of the example is meeting 24-hour surveillance of the situation. if you start seeing defenseless civilians who are being massacred by gaddafi's forces. but obviously, we are going to have to look at the conditions on the ground on a case by case basis. it is going to require some judgment calls. we have sent a clear warning to the gaddafi government that they will be held accountable, particularly when it comes to

assaulting civilians. some of the rhetoric that we have seen -- for example, when gaddafi said they would be going door to door, hunting for people who were participating in protest, you know, that implied a sort of lack of restraint and ruthlessness that i think raises our antenna. what i have said before is make sure we are monitoring the situation and matching our actions with what we think would be helpful on the ground and also sustainable. we have got to do so in consultation with the international community. >> do you agree with your top intelligence official saying -- it is likely that the gaddafi regime will prevail in the long run? is this something that he needs

to be taken to the woodshed for? >> he was making an assessment about military capability. i do not think anybody disputes that gaddafi has more firepower than the opposition. but the make this clear about what our policy as determined by me, the president of united states, it is. i believe the president is on the wrong side of history. i believe the libyan people are anxious for freedom and the removal of someone who has oppressed them for decades now. and we will be in contact with the opposition and in consultation with the international community to achieve the goal of mr. gaddafi being removed from power. >> thank you, mr. president. you talked about the option of

tapping the strategic petroleum reserve. can you walk me through the steps before that? oil price and gas price? and secondly, can you talk about a new addition to energy shock, what are the most grievous parts of the economic recovery and what is your administration doing about it? >> the answer to your first question is no. i will not go through what prices would trigger the release of the reserve. the idea behind the strategic petroleum reserve is if there was a severe disruption in supply, similar to what happened in february, where we were making a decision about whether to sell or not, help our

country would continue, whether we had sufficient supplies for that. another example would be in katrina, when you had a lot of supplies that are impacted. that was another example of a short-term sell level. refineries are actually operating at fairly full capacity at the moment. the problem is uncertainty in the oil markets. part of this is the fact that the economy is growing faster in some places than others, but china, india, brazil, other emerging markets. oil prices went back down because of the recession. a lot of what is happening in prices is because that economic

growth. and countries and economies are starting to use more oil. part of it is also concerned the in terms of what is happening in the middle east. we are confident about our ability to fill any potential gaps and supply. libya does not account for a large portion of world production. basically, even if libyan oil production was suspended because of the unrest, we would be able to fill that gap. so, a lot of this has to do with uncertainty in the market. what i want to communicate to the market is, we are going to do what we need to in consultation with the producing

nations, as well as in consultation with our allies who also have reserves to make sure that will supplies remain stable and economic growth is going to continue. i do want to repeat the point that i have made though that -- look, the american people feel this pretty acutely. their reaction is, this is money out of my pocket. if you were in a house that requires you to commute 50 miles a day to your job, you are not going to be able to sell your house immediately and move closer, particularly in this market.

you may want to buy a fuel- efficient car, but he may not be able to afford it and you are stuck with the old clunker that gets eight or 10 miles to a gallon. there are a lot of us who are unemployed and have low-wage jobs. they are more severely affected because they are using a higher portion of income. we are going to do everything we can, not only to stabilize the market to the extent we see any efforts to take advantage of these price gouging -- we're going to go after that. if we see significant disruptions or shifts in the market that are so disconcerting that we think the

strategic petroleum reserve release would be proper, we will take that step. this is not a situation where it would take a big bureaucracy and several weeks for us to implement. this is something that would take several days. with respect to the overall economy, i think my assessment and the assessment of most economists is that although gas prices are risen right now and taking the tax cuts and using it to buy gas instead of other items, that is an important because of steps we took, both democrats and republicans,

during the lame duck session, that the economic growth is better than expected. we saw the unemployment rate dropped a full point. overall, i am positive. we are moving slowly, but surely into positive job growth over the next seven months. there are areas we're still concerned about. housing is one i just mentioned. housing prices have fallen so steeply. we are still hurting. some of them are the threatened with foreclosure because they lost their job. some of them want to sell their house. the mortgage is higher than what their house would sell for right now. we have steps to encourage banks to take steps that would alleviate some of that burden and start putting some of those homes on the market.

we still have about $5 trillion worth of product. i mentioned the discussion with warren buffet a couple of weeks ago, and his point was, look. i am bullish about this economy. the market takes time to work itself up. we have a housing bubble. there was so much construction, particularly in certain states. that was compounded by the overall recession. we're continuing to take our range of steps for that process of recovery. the last point i make -- it relates back to the budget

issues the talk about. if you look at the last jobs report -- in the private sector, it is very strong. we lost jobs, that is the state and local governments. that means teachers being laid off. firefighters being laid off. we are able to cushion some of that through the recovery act. it made a huge difference across the country. but now, states are continuing to cut. local governments are continuing to cut. i think it is important to understand that long-term debt and deficits are not caused by having a head start teachers in the classroom. our deficits are caused primarily by escalating health- care costs we see in medicare and medicaid that is putting

huge pressure on the overall budget. that is why it is important for us to have a conversation after we get the short-term budget done about how do we really tackle the problem of comprehensive -- in a comprehensive way? not by going after headstart or the organizations for public broadcasting. it means we have to make sure we are tackling defense spending, tax loopholes, that we are tackling entitlements and we are thinking about how to be really get our arms are and what is driving the debt and deficit in a serious and bipartisan way. i will make this the last question.

>> [inaudible] >> why don't you get a microphone so we can hear you? >> thank you, mr. president. you have had talks with other leaders in the middle east. are you looking at how other leaders in the region can be supported to stay in power in the middle east? >> i have had conferences with leaders throughout the middle east. i've had a fairly consistent message from all of them. number one, the united states believes in the rights of peaceful protest and the rights of ordinary people to express grievances to the governments. we oppose the use of violence in response to a peaceful protest. that is one message we tried to

send. the second message we tried to send is it is in the interest of the entire region to reform itself, politically and economically, so that the talents of young people throughout the region can be tapped. so the young man, whether he is in tripoli or she is in cairo, that they know if they work hard and are getting an education, then they have an opportunity to live a better life, that they can get a job that pays a good wage and supports their family, that they have the basic necessities of life, and they have personal security and freedom. now, each country is different.

so, the evolution, the process toward revision will differ in each country. my consistent message to leaders in the region is that this process of change can be a great opportunity for the middle east because if you can tap into the talent of those young people, you can start seeing the economic growth in that region you are seeing in other places in the world. there is no reason why countries in the middle east should not have the same kind of growth rate you see in china and india. there is nothing inherent about the people in those countries to prevent that. what is preventing that is for many decades you have seen a lack of opening up that allows

you to take advantage of the world economy. as i said, each country is going to be different and it will ultimately be up to the people of those countries to determine how all to seize this opportunity. we should be on the side of those who want to seize this opportunity. ok? >> [unintelligible] >> from the japanese media. because we are concerned about what is happening there. >> thank you, mr. president. on the tragedy in japan -- i would like to ask about your personal feeling on the situation. you went to japan last year. people are devastated. i just want to ask about your

personal feelings on that. and the japanese government asked for help for citizens in japan. are you waiting to provide assistance? >> yes. i told prime minister kan we will provide whatever assistance they need. my understanding is they are at capacity, the ability to allow us to help them to clean up from a tsunami like this, as well as an earthquake. you have huge disruptions. both in the infrastructure, boats and houses and cars washed into main thoroughfares. and that requires heavy equipment.

so, any assistance we can provide will be provided. yes, i am heartbroken about this tragedy. when you see what is happening in japan, you are reminded that for all our differences, culturally, or in language or religion, that ultimately, humanity is one. and when we face these types of natural disasters, whether it is in new zealand or haiti or japan, then you think about your own family and you think, how would you feel if you lost a loved one? or if your entire life savings was gone? and the japanese people are such close friends of ours. and i have close personal connections to the japanese

people. i grew up in hawaii where i was very familiar with japanese culture. that just makes our concerns that much more acute. i am very confident that, obviously, that the japanese people are so resource all. japan is such a powerful economy. and such an advanced economy technologically that that will successfully lead them. they had experience dealing with natural disasters. japan will come back stronger than ever. all right? thank you, gentlemen. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011]

>> next, opponents of muammar gaddafi rule it call on the international community to recognize their transitional government. the head of the un appoints a special envoy to libya, and the u.s. house debates ending a home mortgage assistance program. and tomorrow's "washington journal," we will discuss public transportation with american public transportation association president william millar. frank gaffney talks about the u.s. response to the war in libya. washington journal" begins live at 7:00 a.m. eastern time on c- span. >> one-quarter of mortgages are underwater this morning, and one-fifth of all our wealth was wiped out in the great crash.

it cannot run an expansive foreign policy given the financial reality. >> greater thanhulsman advises governments and businesses. his insights into the intersection of money and foreign policy on c-span q&a. >> the libyan ambassador to the u.s. and united nations today call for formal recognition of the newly formed national transitional council as the legitimate government of libya. the group called the libyan human and development forum hosted this 45-minute event at the national press club in washington. >> in the name of god, the most compassionate, the most merciful, or statements from libyans residing in the united states and canada.

after more than 41 years of living in one of the world's -- worst attack on terri regimes in the world, the libyan people have risen up to express their aspirations for freedom and democracy and peaceful demonstrations. the world has been shocked by it response andine's by his public threats to eliminate all public opponents using any means. since the beginning of the protests on february 15, the unarmed demonstrators have been exposed to excessive force, including the use of live ammunition, anti-aircraft guns, tanks, and airplanes to murder innocent demonstrators and civilians and citizens.

in a manner which the world has not seen before. we, the sons and daughters of libya, residing in the united states and canada, as we pray for the souls of the martyrs and salute the struggle of our libyan people for the sake of their legitimate rights announced the following. gaddafi and his regime have no legitimacy and are in no way entitled to remain in power. we call for the complete and zwick application of the united nations security council resolution 1970. we give our complete support for the february 17 revolution represented by the libyan

national transitional council, which was formed and consider the national transitional council the sole legitimate representative of the libyan people. we value france but the recognition of the national transitional council and we call on the american government, the canadian government, the arab league, the organization of the islamic conference, the united nations, the african union, and all nations of the world to recognize the national transitional council as the sole representative of the libyan people and the sole agent responsible for its welfare. the national transitional council is only by the -- the

only body authorized to make decisions pertaining to the political situation in libya and to its international relations and to determine the type of request, that tight -- international support. --call on the government's all governments and international organizations to provide support an urgent humanitarian aid for the libyan people who have been exposed to under president did war crimes, his children, his cronies, and his mercenaries. we call on the american government, the canadian government, libby is neighboring countries, the international community, and all the international organizations to

take steps to minimize legal and strategical obstacles that hinder relief organizations so that they may provide urgent humanitarian aid for the libyan people. long live libya, free, sovereign, and democratic, united under its capital, tripoli. washington, d.c., united states of america, march 11, 2011. we welcome our guests and we will give each one of them five minutes to address us. after that, we will open the question and answer session.

>> thank you very much. i am very happy to be here today and i have to thank the libyan community who have been supporting us since i came to this country. it is my pleasure to serve you and to know you and to cooperate with you. as you know, most of what i want to say as it just emphasize a few points. our main priority is the no-fly zone. we are utilizing everything, lan, skycam air, and ground, and also seas. they are using every kind of weapon that have in their hands. we want the recognition of the

nic. this is a body that we really want to corneille on the ground and have coronation with us. the other thing we need is the humanitarian assistance. we need madison -- medicine. the capital is very strong. i met with senator mccain, lieberman, and others. the capital is with us. you have to show your support for the no-fly zone and for the

recognition of the council. of course [unintelligible] this situation is very serious. now they have started another wave of killing. today we hear that people have been killed and separated by special police and security. that is what i want to say. thank you very much. >> just to add to what he said, we received information that some elements of good of the's secret service or mercenaries have started to bomb streets and to plan mines so that it will explode.

that means he is now attacking civilians with a different way of attack. i knew both guys for about 40 years as these of libyans, and he has shown the united nations security council that he is a true libyan and we welcome him here and give him the floor. >> it is a pleasure to be at this gathering. our people are suffering, but they are afraid. we know that freedom is not free.

that is the lesson we inherited. i do expect that they will attack in gaza with chemical weapons. -- benghazi with chemical weapons.

i am sure that he is completely insane. he is completely disconnected. he is struggling. his family is divided. at the end of the day, i think he is going to flee. i don't know where he will find a haven. or to commit suicide or be killed by his inner circle. he will be the last tyrant of the world. libya will be an excellent country because we suffered a lot of dictatorship. our remedy will be democracy.

we will have freedom for women, libya of freedom, youth of freedom. we are ready to fight. we have suffered a starvation at the time of the fascists. do you think that you will think of roma and have victory?

if anyone attacks my country, i should resist. that is our language, not a victory or defeat. our duty is to fight and we will never surrender. thank you very much. [applause] >> thank you for those very warm and courageous words. the floor is for the journalist to give them the opportunity. where is the other microphone. i have one on this side and the other to be on this side.

i would like everyone to recognize himself first and then address whoever they want. >> [speaking foreign language] . [speaking foreign language]

>> i think that that will be discussed with the united states department of state. we already have the green light that we will be active to work here. actually, i had the authorization about 10 days ago from the council that represents the libyan people. [speaking foreign language]

[speaking foreign language]

[speaking foreign language] [speaking foreign language] >> whoever asks in a language will be responded to in the same language. >> ambassador, yesterday the

former deputy secretary of defense, paul wolfowitz, spoke as the -- spoke of the no-fly zone as an ill-advised effort. the national security adviser spoke of other military measures. have you discussed other military measures? will these be able to deter gaddafi? >> this is very important for the libyan people to protect the fighters from this guy because they have no means to defend themselves against the air strike. as you know, sometimes i find it very difficult when they tried to make the issue like -- i think that the international community is serious and this is not that difficult.

this guys are very clear most of the time. i believe -- the skies are very clear most of the time. i believe now through the media they have seen a situation in libya. there is a massacre going on. the massacre is going on in libya and the media is able to take and show the world. there is a discussion with the department. i found that they are wasting their time. all of the options on the table, all the time. take one option at least. then, we will see more support and more recognition but this must be stopped now.

now. >> thank you. >> thank you. ambassadors, we understand that you have come from the treasury department and state department. can you tell us what the content was of the discussions that you had? >> a long discussion regarding the libyan assets. they have about $30 billion. it is quite important to follow this process. where gaddafi got his money, we are dealing with the european union, the security council. this is the wealth of our

people. we would like cooperation from the americans regarding this issue. we have a team to follow this process. we are looking at the situation with the food and medicine. the only organ is resisting the libyan people and the national council. he has the ability to use this money for the benefit of the libyan people. it takes time. we have on our side one expert and from their side, someone to follow this issue. at the state department, we had

a meeting with the undersecretary and others who are following this issue of libya. we are discussing the details. what we want is some real action from nato, from the international community, from the u.n., to jam the whole systems of to indications of gaddafi. he is using the air strikes against innocent people as what happened today. we're also discussing our mission in washington. i can guarantee that our mission is still active to guarantee our

people, especially our students. anyhow, i think now a meeting will be held monday in paris between the secretary of state hillary clinton and the representatives of the council. it will be very important. we would like the recognition of friends of our national council. these revolutions are quite important. we should be patient, as i said. after 42 years dictatorship, we

started our struggle. we should be patient. the european parliament, the european council, the united states. we hope that the ministerial meeting in cairo, they will have a new vision and support our people. .e don't support slogans we don't want any imperialism, that is nonsense. physically, we don't want any soldier to be in the libyan soil. no, we are ready to confront gaddafi. but we need technology and the support of the international community. i know that some arab countries

-- i cannot say exactly -- to stand against gaddafi and recognize the national council. i asked them not to support against our people. not to stand with gaddafi against our people. we don't want slogans. they should do something to stop this bloodshed. we will never forget any action taken against our people to shed the blood. allen never -- our people will never forget. anyone who gives a hand to gaddafi to kill our people. thank you.

[applause] >> gentlemen, i have a question for both of you. in your official capacity in the u.s., how much are you permitted to function? are you working out of the embassy? can you report to the u.n.? are you under the new government? what are you achieving in the u.s. during this interim period? >> well, i receive a note from the state department referencing the libyan embassy function. we have until next wednesday that i would be able to go to the embassy and do my job. after that, they have to seal the embassy and i will have to

do -- find a place to do my activities from. >> the libyan mission in the u.n., the diplomats, the employees, they are supporting the uprising of our people. we have lots of diplomats. we are freedom fighters. we are supporting our people and we're able to do that through the mass media. -- was nominated to be the ambassador. he did not come. he is a nationalist, he is a real live yen. -- he is a real libyan.

he will never be against his people. the people from his region are fighting the attacks. i don't think that he is also insane. gaddafi will never find a libyan, on aug. libyan to represent him anywhere. -- an honest libyan to represent him anywhere. they came to me and said, if you don't have a salary, we will share everything with you. thank you. >> thank you.

the obama administration has not yet officially recognize the opposition council. they say they're waiting from assurances from you as to what your goals and motivations are for a future of libya. what assurances are you giving u.s. officials with your meetings at the state and treasury over the next couple of days? >> we were speaking about this council as the future of libya. in 1951, when we got our independence, we had at that time 20 or 25 graduates and we ceded to divide the constitution. my father was of the first

parliament in libya. these people are able. how many students have graduated from this country? more than 15,000. don't listen to what gaddafi as saying. the freedom takes minutes but democracy takes time. when the president stepped down, tunisia became free. to have the organs of democracy takes time. how long does it take to have

democracy and concepts of democracy? libya is now free. i am sure as i told you after this experience with gaddafi, we will have something different, real democracy. we have suffered from dictatorship. i think that president obama is not just a president, he is a scholar. he is working for freedom. he cannot be indifferent regarding what is going on in libya. he is responsible for that. europe is responsible for that. i am speaking about freedom, democracy, justice, a human- rights. what happened in libya? our people tried to say that we want freedom.

they killed them. they did not even throw stones, nothing. they shot them. in arabic as say -- [speaking foreign language] [speaking foreign language] [speaking foreign language]

[applause] >> i wanted to ask you with regard to hillary clinton visit to meet with the council when she visited north africa -- when she visits north africa, what do you hope will come out of those meetings and will there be a formal request from the u.s. in terms of arms? a follow-up to my colleague's question, how cohesive is the council's position for a post- gaddafi future. are you concerned that radical

elements will use this to push towards a non sequitur democracy? use don't want to just rhetoric but now we want something tangible on the ground from the americans. what we want from america come from the international community, from the one is quite clear. -- what we want from america, from the international community. stop gaddafi using air strikes against our people, our investments. they are able to do that. they went to iraq saying that. gaddafi says he has weapons of mass destruction. it was lies. in libya, everyone is seeing what is going on.

gaddafi is killing his people. they're killing our people. they're supposed to be is people. we want them to stop the bloodshed, support our people, recognize the national council that represents the whole the yeah. the future of libya will be done by the libyans, not by the americans. -- recognize the national council that represents toll of libya. we have our young people, we have our officials. today, we went to the treasury department. we spoke about them. they were astonished when he

told them about some details and some technical procedures. we have this generation that is able to fight. they ask, who started this resolution? -- revolution? students, women who are professors. libya will have a new democratic society. free women, free religion, the islam of freedom, women of freedom, society of freedom. what we want from america is quite clear. we told them, we told them, and we told the u.n., after gaddafi we are able to have and build a new libya.

a democratic, free, moderate, modern. all of us are muslims, all of us sunnis.'s -- are we have no factions in libya. we are oblivion's, 100%. we are patriots. -- we are libyans, 100%. we fought against the italians, the sacrifice is quite clear. we are proud of them. there is no difference between us. there is no tribalism in libya, we are one tribe, the tribe of libya. [applause] >> after the liberation of the

cities in libya, most of the cities have established civilian governing bodies. these civilian governing bodies are made up of lawyers, judges, the use of the movement you -- youth of the movement. they have done a better job and the people have seen the difference. what we see in the western press, people do not know what is going on in libya. they speak of things that are very alien. there is no civil war because there are no civilians fighting each other. there are the people fighting the mercenaries of gaddafi. there is no tribal divisions because we are united in a tribe

called the tribe of libya. believe me, some of our friends in the media need to do some homework. we thank them for a lot but there is no extremism or al qaeda in libya. there is no civil war in libya. those who have been in the foreign media, they have reported it but still we hear these words around. sorry for the interruption. >> [speaking foreign language] >> do you need to go?

>> are you worried about a divided libya? >> take two questions together. >> i would like to ask -- what did you asked the u.s. in terms of military assistance? did you ask for arms for the opposition, did you ask for air strikes? what did you ask for? >> well, we asked them for anything that makes this revolution go through and for gaddafi to step down. anything we can do for this. this revolution will not go back. the libyans have no choice, either victory or die. gaddafi will slaughter them. anything that can help, we are ready to except as long as there

is no physical presence on our soil. -- we're ready to accept. >> you asked about a divided libya. this is impossible. believe me, believe me, i am from the south. most of my friends are from benghazi. my wife is from the middle of libya. if you can divide yourself, your body, you can divide libya. [applause] >> for the sake of his schedule, i would like to thank him very much. >> i would like to say thank you to the libyan community, thank you for the press for being here today. thank you for taking take care of our host.

thank you on behalf of the libyan people. i would like to thank the ambassador. he came to the foreign affairs department in 2000. i did not know him at that time. he was the director of the america department and of your department. -- and europe department. after a year, he said miti candidate to open our mission there. he was my boss and he still is. i would like to thank him very much from joining us today. he came all the way from new york. the speech he made in security council, that is a historical speech. that makes people cry inside of the room, outside, and all over the world. he is a man with principle, he is a man with thinking. i am very happy that we have someone like him.

he stands with the libyan revolution and for the cause of libya. he believes in freedom, justice, hope, a human libya. i am very proud to know you and work with you. you were my boss and you are still. [applause] >> i would like to thank all of the panelists. they have been working day and night to bring this together. i would like to thank all of the libyans and those who came from around the country to attend with us. thank you for really joining us and for being a real patriot libyans.

[applause] before the libyan attendance, we need you to stay here for a while. -- for the libyans, we need you to stay here for a while. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011]

[no discernible audio] >> also today, the u.n. secretary general named a special envoy to libya to assist with the amana to -- with the humanitarian crisis. they both spoke briefly with reporters to talk about the region.ole in the >> good morning, ladies and gentlemen. i am very pleased to be here with you.

i am joined by my new special envoy to libya. as you know, he has served as the foreign minister of jordan and he is now serving as a senator of jordan. we just have completed a very detailed discussions concerning the fooled by mentions of the crisis in libya and the role he will play. as the former foreign minister of jordan, he brings a seasoned understanding of the dynamics of the region and a wealth of experience. this is a critical and demanding assignment and i am grateful to him for taking it on. our most immediate challenges our humanitarian. with each day, the death toll mounts and the situation for the libyan people grows more desperate. we have all seen how the

fighting has escalated. civilians have borne the brunt of the violence. increasingly, they are being targeted. my message has been strong and consistent, the violence must stop. humanitarian aid must get to those in need. those responsible for violence against civilians will be held accountable. a peaceful resolution must be found. that is why i have decided to dispatch abdul ilah khatib to libya soon. he will depart from new york over the weekend it joined by a team that includes senior monetary officials as well as the staff from political affairs and the office of the high commissioner for human rights. i expect him to arrive in tripoli very soon are the next week. the objective will be to assess the situation on the ground and

undertake broad consultations with the libyan authorities on the immediate humanitarian, political, and security situation. i have instructed him to convey in no uncertain terms the concerns of the united nations and the international community as expressed in the security council resolutions. he will report back to me as he continues his work. he will need to concerts -- consult with the libyan authorities and other parties as well as with the neighboring states and regional organizations on how best to resolve the crisis. yesterday, i met with the members of the security council who informed me that they are continuing to engage fully on these issues both to ensure the implementation of the security council resolution as well as to

consider next steps. for my part, i have been consulting vary widely on libya and also the challenges in the region. in every conversation and at every opportunity, i have urged the leaders to listen to the voices of their people, to keep the aspirations for change and towards a better future and a fully inclusive democracy. i will go to the region myself later this week and i intend to visit egypt and tunisia. just before that, i will consult with the central american leaders in guatemala. thank you very much. i would like to introduce mr. khatib. >> thank you very much. i would like to thank the secretary general for his work and confidence in me and

choosing me for this delicate and crucial mission. i accepted the secretary general's officer -- offered in the hopes that i can help libya and its people to overcome the current crisis. i'm understand the complex nature of this task and the gravity of the situation on the ground. i start my mission hoping that this effort that i undertake on behalf of the international community will exceed -- will succeed in stopping the killings and addressing there's humanitarian needs and preserving the unity of the libyan people and the integrity of their homeland. achieving these goals is essential for enabling the libyan people to choose their future and determine their destiny. i look forward to conducting this mission in full cooperation with the secretary general and with the relevant u.n. agencies and their leadership as well as with member states.

i will commence as soon as possible my contacts and consultations with the arab and african group and other states in order to coordinate an effort in assisting the libyan people. i look forward to the full support by the secretary general and his staff. thank you very much. first >> mr. secretary-general, first of all, how long will your team headed by the foreign minister will stay in libya and will you ensure the freedom of movement? my question to you will be in arabic. [speaking arabic]

>> [speaking foreign language] >> [speaking foreign language] >> [speaking foreign language] >> wednesday morning, i had a telephone talk with the foreign minister of libya and we discussed my intention of

dispatching mr. khatib. his visit for the exact duration of his say, we will have to see. he will be there for several days meeting with government officials and other necessary people. that is not yet sure. then he will come back to brief me in the region while i will be traveling in tunisia and egypt. then we will discuss further steps of his work. >> you said that the main purpose at the moment is humanitarian but to what degree do you see this as a political role in taking a central position in trying to mediate a situation like cease-fire or

whatever? >> he is a special envoy of the secretary general to libya. at this time, we expect that we need to take urgent action to stop all of this violence. this has very serious humanitarian implications. he will focus on putting an end to the violence. i expect that he will be engaged in broader dimensions of this crisis, including political issues. >> will mr. khatib meet with the opposition government? >> i will try to learn as much as possible about the details of the situation on the ground and meet all parties concerned. that is essential to know the

positions and views of all parties. >> thank you, mr. secretary general. would you go for a cease-fire to allow humanitarian aid for the civilians in many parts of libya? have you had any contact with the provisional council in benghazi? thank you. >> my message has been consistent and clear that violence must adopt. but the humanitarian workers and -- my message has been consistent and clear, let the violence stop. the humanitarian workers must be able to do their work. >> have you contacted the provisional council? >> no, i have not. >> is this a legitimate

representative for the libyan people? >> their recognition of this council or any government is a matter to be determined by the member states of the united nations. >> secretary general, there is a lot of talk by prominent u.s. senators and four other countries to by sending weapons to the rebels in libya. do you think that this would violate resolution 1970? in that case, what with the u.n. do? >> i understand that the international community including the u.n. security council, they are discussing a full range of options for the next steps. this is up to the member states of the security council to determine the future course of action.

ok, thank you. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> tonight on c-span, the u.s. house debates and in a home mortgage assistance program. congresswoman gabrielle giffords doctors give an update on her medical condition. later, president obama at today's white house news briefing. >> on "washington journal," we will discuss public transportation with american public transportation association president william millar. we will discuss the response to the civil war in libya. also the problem of bullying in schools with a representative from the national school boards

association. >> this weekend, but tv is live with two days of panel discussions and interviews from the tucson festival books. there will be panels and immigration, women and leadership, and a look back at the 60's. also, bbc historian talks about the genealogy of barack obama. for a complete schedule of these programs, go to booktv.org. >> despite what passes as conventional wisdom, there's nothing radical on american in holding these hearings. >> ascribing evil acts of a few individuals to an entire community is wrong.

this makes our country less safe. >> watch the entire hearing on possible radicalization in u.s. muslim communities along with other events before and after the hearing, including reaction from yours. research, watch, a share. this is washington your way. >> today, the house voted to end a federal program that helps unemployed homeowners make mortgage payments. the bill passed today rescinds $1 billion in unspent funds previously allocated to the program. this is an hour and 15 minutes. the chair: the house is in the committee of the whole house on the state of the union for consideration of h.r. 836 which the clerk will report by title. the clerk: a bill to rescind the unobligated funding for the mortgage relief program and to terminate the program.

the chair: pursuant to the rule, the bill is considered as read the first time. the gentleman from texas, mr. hensarling, and the gentlewoman from california, ms. waters, each will control 30 minutes. . the chair recognizes the gentleman from texas. mr. hensarling: thank you, mr. chairman. i yield myself such time as i may consume. the chair: the gentleman may proceed. mr. hensarling: mr. chairman, the american people woke up several days ago to the very sad reality that this nation has just incurred its single largest monthly deficit in the history of the nation. $226 billion with the back of the envelope calculation roughly $2,500 for every household in just one month. mr. chairman, february is the

shortest month of the year. this is on top of our nation's first trillion dollar deficit, our nation's second trillion dollar deficit, and now according to the budget presented by the president of the united states, the third largest, the largest deficit in america's history and the third trillion dollar-plus deficit. mr. chairman, the nation is drowning in a sea of red inc. -- red ink. if we were to help job creators create jobs today, we've got to start taking away the uncertainty of this huge national debt. if we want to save our children from bankruptcy tomorrow, we've got to start doing something about the national debt. but everybody says essentially not in my backyard.

not with my programs. not today. let's do it some other day. let's kick the can down the road. mr. chairman, this is a nation that is borrowing 40 cents on the dollar, much of it from the chinese, and we are sending the bill to our children and grandchildren. this is a form of intergenerational theft. the democratic whip, the gentleman from maryland, when republicans were in control, and the deficit was a fraction, a fraction of what it is today, he turned -- termed it fiscal child abuse. mr. hoyer, the gentleman from maryland, said that when the annual deficit was $200 billion. now, the monthly deficit is $200 billion.

if we want to help create jobs today, if we want to spare our children bankruptcy, we got to quick spending money we don't have. so this week, mr. chairman, house republicans have brought a couple of bills to the floor to do something that is rarely ever done in this institution, and that is to save american families and save small businesses money. terminate a program. as we are coming off the 100th anniversary of ronald reagan's birthday, i'm reminded and perhaps i don't have the quote exact, but he said something along the lines, the closest thing to eternal life on earth is a federal program. so the bill we have before us today is a program that was originally authorized in 1975

and was never funded in its 35-year history. now, $1 billion has now been allocated for this program. nobody's used that money. it's in a series of so-called foreclosure mitigation programs that the administration has put forth, almost all of have i have been abject failures even by their own yardstick, own measurement. number one, the best foreclosure mitigation program in america is a job. it's a paycheck. not government check. it's a paycheck. job creators are hampered by the uncertainty of the national debt. historic levels of debt will lead to historic levels of taxation, which leads to historic levels of unemployment. the equation could not be more

true, could not be more elementary. but don't take my word for it. let's hear from some of the job creators in america. let's hear from the c.e.o. of caterpillar which employ tens of thousands of people across our nation. quote, entitlement programs coupled with the coming wave of retiring baby boomers will push the deficit to untenable levels. it is a train wreck. mike jackson, c.e.o., auto nation. 19,000 employees, quote, the best thing that this town could do to help the economic recovery become sustainable is to deal with the deficit. the former chairman and c.e.o. of home depot. over 200,000 employees in the

u.s., if we continue this kind of policy, we are dead in the water. businesspeople, they don't know what's coming. the debt, the budget, this debt we have is in the trillions. i'm going to have to pay for this somehow. you know, mr. chairman, these are just a few of the voices of job creators. so i'm heartened to see that the unemployment rate has ticked down last month. frankly it is attributable mostly to the fact we now have divided government. job creators now know there is some check on the excesses of of the bomb. it is a testament to the fact that at the end of the last congress, republicans were successful in blocking at least for two years the single largest tax increase in america's history, and i don't know any american who believes if you increase taxes on their company that that's going to lead to a raise, a bonus, employing more

workers, and finally we have what warren buffett calls the regenerative nature of the free enterprise system. this is an economy that wants to recover. but since the great depression, we never had a longer recession or more tepid recovery and it's due to the policies of the president and the previous democratic congresses. so if we want to create, help create jobs today, we are going to have to show that we can put the nation on a fiscally sustainable path. this is a $1 billion program where not $1 has left the door yet. i'm sitting here thinking, mr. chairman, if this body, after having 75, 76 some-odd different government housing programs that add up to roughly 56 some-odd billion dollars, that frankly

have grown at an exponential over the family budget, the family budget has to pay for the h.u.d. budget, if we can't terminate in order to save our children from bankruptcy, in order to help create jobs, one program at $1 billion, where not one penny has left the door, how are we going to make the tough decisions that are necessary to save the country from bankruptcy? mr. chairman, at some point you got to quick spending money you don't have. at some point when do you ever say enough is enough? we are tired of borrowing money from the chinese. is this the future of our children? is it their destiny to shine the shoes of the chinese? is it our children's destiny one day they'll wait tables for the chinese? that's not the dream i have for my 7-year-old son. it's not the dream i have for my 9-year-old daughter. it's not the american dream. the american dream is to leave

your children with greater freedoms, greater opportunity, and a higher standard of living. that's what i believe the american dream is. and if we can't terminate one program, which the obama administration itself says we are going to lose 98 cents on the dollar, i didn't say it, but the obama administration said it, losing 98 cents on the dollar. if we can't do this, mr. chairman, i have great fear and great trepidation for the future. so i urge, i urge my colleagues to take one small, teeny, tiny, baby step towards the path of fiscal sustainability. take one measured baby step and tell job creators in america we are going to put the nation's fiscal house in order. go ahead. it's safe to invest in america again. it's safe to create jobs. we are going to get this done.

take one tiny step today. to help create those jobs and save our children from a pathway to bankruptcy. i reserve the balance of my time. the chair: the gentleman reserves his time. the gentleman from massachusetts, mr. frage, -- frank, is recognized for 30 minutes. mr. frank: i yield myself such time as i may consume. i hope members will be careful walking on the floor right now, especially on the republican side of the aisle, because i wouldn't want anyone to fall into the enormous gap that has just been created between the gentleman's comments and his voting record. we heard a great argument about the need to cut the budget deficit and stop spending. during the recent debate on the budget, an amendment was offered to limit entitlement spending to farmers to $250,000 per entity. the amendment said, no

agricultural entity, no individual could get more than $250,000 per year. it was defeated by the republican majority. -- republican party. the majority of democrats voted for it. we had the brazilian cotton farmers, my friends on the other side hate for me to mention that because unpleasant reality is bothsome, over a four-year period we are going to spend more money subsidizing american and brazilian cotton farmers than we are on this program. now the gentleman from alabama said yesterday that it was obama that made him do it. rather implausibly he argued that he was compelled to follow this recommendation of the obama administration to send $150 billion -- $150 million a year to brazilian cotton farmers for four years because the president told him to do it. well, that's a very selective invocation of the president. i must say no more persuasive

than flip wilson having innoked the devil as having made him -- invoked the devil as having him made him do it. $150 million -- the argument by the way was that we have to send $150 million to the cotton farmers because otherwise we would be in trouble with the world trade organization. but we could have saved that $150 million to the brazilians by not sending $150 million to american cotton farmers. that would include american cotton farmers who get more than $250,000 a year. we are not debating about whether or not we should reduce the deficit. it is now. do you exempt agriculture, as many of my friends do because they represent agricultural districts? and the conservatism, the free market, that's got no application to the growth of cotton or grain or many of these other programs that receive so much money. beyond that, we have the military. now, we are talking here about trying to stop a serious

economic problem in american cities. we can't afford that. but $400 million was voted to be spent on infrastructure in afghanistan. i do not think that $400 million will be very well spent. i understand some national security needs. i think that war's gone on too long. but the notion of sending $400 million to build up cities in afghanistan and deny help in america makes no sense. we are also being told that we can send $1 billion for iraqi security forces over and above what we spend on the american military, we are sending $1.2 billion, i voted against that. members on the other side voted for it. the whole war in iraq, an enormous waste in my judgment of american money at the cost of american lives, brave young americans went to war when they were asked to by their country, but it was a mistake for them to be sent there. the war in iraq has so dwarfed any domestic expenditures in

this area i don't understand how members on the one hand can talk seriously about cutting the deficit and voted for more and more and hundreds and hundreds of billions of dollars for that war in iraq. now we have another point that should be made. it is true, this billion dollars that we are asking for, by the way it will cost the c.b.o. $840 million, not 98%, 84%, still a high number, but $140 million is $140 million. this will cost $840 million according to c.b.o. if it is fully run. it is going to come out of the treasury right now. let's be clear, the reason it will come out of the treasury as we try to deal with this -- here's what the program is, it says to americans who took out mortgages, and became unemployed , that we will help them pay their mortgage because you can't afford mortgage payments out of unemployment compensation. that's the lavishness of this program. we are taking people who are in

trouble and facing losing their homes and having more foreclosures, which have negative effects not just on the individual foreclosure but on the neighborhood, the city, the whole economy, this has a macroeconomic impact. . we are going to come to their assistance. in the financial reform bill passed last summer, we in the conference committee voted to take this money from an assessment on the largest financial institution. we voted that financial institutions with $50 billion or more in assets and hedge funds with $10 billion or more in assets would have to pay for this. and our logic was it was the activity of these institutions that caused the crisis that led to the unemployment and led to the foreclosures. many of them profited from it and then we had the tarp. this is money that we voted in the tarp and in other set of programs and we said, you benefited from intervention.

we didn't do it because we loved you. we did it because we had to save the economy from going upside down. i know members like to talk about bailouts. let's be clear. every activity in the united states known as a bailout recently was in the initiative of the george bush administration of mr. paulson and mr. bernanke and it was bipartisanly supported. i agree we had to do them. we had to do them was because of failure in past regulatory policies. the fact is in the bill we passed last summer this money wouldn't have come from the treasury. it wouldn't have been added to the deficit. it -- the republican party popped it. not here but in the senate. i will make this announcement. i plan to reintroduce next week the prevention of the financial reform bill that would have taken the money for this program and other programs to alleviate the impact of

foreclosure. the neighborhood stabilization program that helps gets foreclosed properties back into use, aid to homeowners who are unemployed and pay for it as we tried to do last year but republican opposition stopped us, not from the taxpayer but from the large institutions. and i don't mean to demonize but i think goldman sachs and wells fargo and bank of america and city corp and morgan stanley, i think they can pay for this -- citicorp and morgan stanley, i think they can pay for this. with regard to the bill we did yesterday -- you can eliminate so much error -- but i think error outpaces me when we get into these debates. we talked about money that was going to be spent in another program, the f.h.a. refi and people talked about $8 billion.

yes, $8 billion -- it won't cost $8 billion but $8 billion that was set aside if necessary from the tarp and people say that tarp money was promised to go back to the taxpayers. this is how. members may have forgotten. but in the tarp legislation we added a provision that in 2013 when the tarp is concluded the president at that time is mandated to send to the congress a bill that would recoup the funds that had not been refunded to the treasury from those large financial institutions and we added that in the mortgage reform bill. so the tarp money that would be spent, if it is in refinancing, and the tarp money that would be spent on the ham program would not come out of the treasury. it would be reimbursed to the treasury if my colleagues go

along with what we voted for from the large financial institutions. so let's be very clear. whether we're talking about the programs in the financial reform bill or the programs in the tarp, they are a package of programs to deal with the consequences of foreclosure. i must say i saw a draft of my republican colleagues' budget fuse and they said astonishingly that spending tarp money to deal with foreclosures was inappropriate because those were unrelated to the financial crisis. foreclosures unrelated to the financial crisis? that is an ill logic that i am surprised at. ideology drives you to certain ridiculous conclusions but that one goes further into that than i would have thought. so let's be very clear. our proposals are that the large financial institutions, assets of $50 billion or more, $hedge funds of $10 billion or more, most of which would direct beneficiaries in

activity dealing with the financial crisis that many of them helped cause that that's how we would fund these programs. so with regard to the hamp, with regard to the f.h.a. refinance, no, that will not come out of the treasury. that will be reimbursed ultimately. yes, the tarp money goes back and the law calls for that to be assessed and so, yes, i understand my republican colleagues, they don't want goldman sachs or citicorp or any of the large financial institutions or any of the large hedge funds to have to pay the costs. that's what what's the debate is. the large financial institutions. and, yeah, they d did succeed -- they did succeed, i hope. they did knock out part of the bill that would help us mitigate foreclosures and help us have cities buy up property that is rotting and causing trouble. and unfortunately temp rearl

that's not the case, but -- temporarily that's mott the case, but given the concern for the taxpayer they'll have a choice. do you add the cost of these programs to the deficit because they are not going to become law, the repealers? are you then going to say that it will come out of the deficit or will you join us in taking it from goldman sachs and morgan stanley and bank of america? and those are reasonable institutions that do a lot of good work. but they can afford these dollars. their bonuses alone will pay for these programs. first of all, we have people who are prepared to send money to brazilian cotton farmers. they will not limit entitlements to agriculture individuals to $250,000 a year. they'll send billions to afghanistan and iraq that will be wasted, not for our defense, but to build up their infrastructure and their security. and then, when it does come to

the relatively small amount that we will spend on some of these programs, like $840 million, and it's small compared to what they spend, elsewhere, for instance, in their wars, they would rather have it come out of the taxpayer. they would rather not spend it at all. the second choice is come out of the taxpayer and not -- not out of the large financial institutions. so let's frame the debate appropriately. the large financial institutions, because of inappropriate regulation and improper regulation during the bush years, early in the clinton years as well, but mostly the bush years, provoked a financial crisis. we began to deal with it in 2008 in the last month of the bush administration and in a bipartisan way we did it. we provided some funding in the first instance of those financial institutions not out of love for them but because we thought they needed to stabilize. money spent under the tarp would be recouped by an

assessment by a large financial institution. republicans probably want to forget that one. probably because they can't bear the thought of telling the large financial institutions who were a large part of the cause of the financial crisis that they should have to pay. and we do know that when we said this program and programs to give money to municipalities, which they very much want to buy up property that would otherwise fester because there would be nobody to make them take care of it, that they preferred that to be paid for by the taxpayer than by the large financial institutions. we'll give them a chance to correct that mistake. so i hope this bill is defeated and next week we will have legislation that i hope our committee will be having hearings on and act on which will reinstate the provision that says all of the four programs we're dealing with this week and next week will be dealt with in one of two ways. it will be financed by the tarp and that money will be recovered when the program is

over by an assessment on the large financial institutions, and the smaller amounts that will go to this program, that money will also be recouped from the large financial institutions. and those institutions, which received hundreds of billions. they have repaid it and has been useful. but they were great beneficiaries of it. they caused some of the problems in general. they will be the ones that will bear the costs. so that's the choice. we have a choice of doing nothing to alleviate the impact of foreclosures on the overall economy, on municipalities and on families or of doing something and recouping that money from the large financial institutions. i hope that we will in the end decide that we were right to say that the large financial institutions can appropriately ask to bear part of that burden. i reserve my time. the chair: the gentleman reserves. the gentleman from texas.

mr. hensarling: mr. chairman, at this time i yield two minutes to the distinguished majority leader, the gentleman from virginia. the chair: the majority leader, the gentleman from virginia, is recognized for two minutes. mr. cantor: i thank the speaker. i thank the gentleman. for the past several years, the conversation in washington is how much we can increase in spending. today the debate is centered on how much we can increase savings. on november 2 voters sent a message that they will not sit by as congress spends our way into national decline. it was a statement of rejection towards the buildup of debt and burdensome regulation that continues to crowd the prospects for the future. the new republican majority has responded with a cut and grow agenda designed to help with the results. growing private sector jobs in the economy is one of those. last month we voted to cut spending down to 2008 levels.

today, through our youcut program, we offer american taxpayers the opportunity to recoup roughly $300 million in wasteful spending. the savings comes from terminating a program funded in the dodd-frank regulatory bill. this mandatory spending program allegedly provides loans to homeowners potentially facing foreclosure but is estimated that the subsidy rate, meaning the amount of the loan that will not be repaid, is 98 cents out of every dollar. so we are borrowing money we don't have to give loans to certain homeowners that can't repay and that other american families will have to pay back in higher taxes in the future. this program truly does not make sense and leaves everyone worse off. at a time, mr. speaker, we must do everything in our power to balance the federal budget.

this legislation must pass and i urge my colleagues to vote in favor of it and i yield back. the chair: the gentleman yields back. the gentleman from texas reserves. the gentleman from massachusetts. mr. frank: how much time has been used on both sides? the chair: the gentleman has 15 1/2 minutes left and the gentleman from texas has 18. mr. frank: then, i will yield four minutes to the gentleman from north carolina, mr. watt. the chair: the gentleman from north carolina is recognized for four minutes. mr. watt: thank you, mr. chairman. and i thank our ranking member for yielding time. i am here today because this is a series of actions all of wish i oppose that's in sequence, and i think we need to put this in perspective. yesterday my colleagues were proposing to terminate the

f.h.a. refinance program that helps people refinance mortgages under f.h.a. next week we'll be back on the floor out of our committee with a proposal that they have made to do away with the community stabilization program which is designed really to stabilize communities and keep people who own propts and are trying to pay their mortgages -- properties and are trying to pay their mortgages from seeing their properties go down even further. and next week they'll be offering a proposal to do away with the mortgage refinance assistance program called hamp. of all of the four propes, -- proposals, including the one we are here debating today, this i

think is the most mean-spirited and most duplicitous one, and i think the one that most vigorously deserves to be opposed by my colleagues here in the house. because this proposal is to do away with a program that assists people who were employed, got a mortgage, were paying their mortgage, then lost their jobs to the downturn in the economy and found themselves in a position where they could no longer afford to pay their mortgage. these are not people who are out getting second homes. these are working people who had jobs, fell on bad times and

lost their jobs and getting unemployment benefits. and all we're saying is give them a break for 12 months and give them the opportunity to go back into the marketplace and find a job and then they can resume paying their mortgages. . it is absolutely mean-spirited to say to somebody who has complied with all the rules and lost their job by no fault of their own, and then find them selves unable to pay -- themselves unable to pay their mortgages that we won't try to give you some measure of relief. it's further complicated, made even more duplicitous, really, by a provision that has been inserted into this bill that the secretary of housing and urban development to conduct a study

and based on that study issue a report on the best practices that could be used to implement this program, a program which they are proposing to terminate. why would you have -- why would you spend taxpayer money to have a study on the best practices to implement a program that the bill itself says is going to be terminated? a waste of taxpayer money. yet my colleagues are here representing to the members of this house and to the american public that their whole objective is to save the taxpayers money. the chair: the gentleman's time has expired. additional minute, without objection. mr. watt: i don't understand the rationale of my colleagues. it would be something else if this bill was going to see the light of day in the senate.

it's not going anywhere. this is a message bill, mr. chairman. that's all this is about. let's send a message to the american people that we can cut. we can cut. whether we are cutting money that's taxpayer money or cutting money that's going to be paid out of the top fund that the law requires the biggest financial institutions in america to make the taxpayers whole if at the end of the day there is a deficit in repaying this money, it doesn't matter, let's just stand up and beat on our chests and say to the american people, and think that they will believe that we are doing something to save them tax dollars. the chair: the gentleman's time

has expired. the gentleman's time has expired. for what purpose does the gentleman from alabama rise? mr. bachus: mr. chairman, i yield one minute -- two minutes to the gentleman from new york. the chair: gentleman from new york is recognized for two minutes. mr. grimm: thank you, mr. chairman. thank you, mr. speaker. i rise in support of the emerging homeowner relief program termination act, and i'm sitting here and i hear that we are mean-spirited. it makes me think of the last year that i had with my father before he passed away. i spent a lot of time with my dad because i was taking him to the hospital. he had lung cancer. we had to sit and wait often more than an hour to see the doctor to get his test, to get his chemo. i asked my father knowing that his life was nearing an end, what was the toughest thing he

ever had to do. my father told me the toughest thing he had to do was tell his children no. sometimes when your child -- you ask the things, whether it be new hockey skates or baseball myth or whatever -- baseball mitt or whatever it may be, and a good parent sometimes says they can't afford it. well, i don't think it's mean-spirited to step up and answer the message, not that we are sending, but the message that the american people sent us. that we cannot continue reckless spending. and this program to put it right back on point, this program is the postage child -- poster child of waste and reckless spending. it's not anyone in this chamber that said it's going to be subsidized 98 cents on the dollar. we will lose 98 cents on the dollar. the administration said that. 98 cents on the dollar. we cannot continue to spend on

programs that are failing. that is the definition of waste. and we were sent here to cut the spending to stop the waste for one reason. so that we can grow the economy. and when we grow that economy, we actually create jobs. the whole point if i understand the argument on the democratic side is that these people have lost their jobs. the chair: the gentleman's time has expired. mr. grimm: 30 seconds. mr. bachus: 30 seconds. the chair: the gentleman is recognized. mr. grimm: for that reason the answer is not more failed programs. it's growing the economy and creating a job. we need to give them hope not false hope. with that i yield back the balance of my time. thank you. the chair: the gentleman yields back the balance of his time. the gentleman from alabama reserves. mr. bachus: mr. chairman, could i inquire as to the time

remaining on each side? the chair: you have 15 1/2 minutes. and the gentleman from massachusetts has 10 1/2 minutes. mr. frank: i would prefer to reserve. the chair: the gentleman from alabama. mr. bachus: thank you. at this time i yield one minute to the gentleman from california, mr. mcclintock. the chair: the gentleman from california is recognized for one minute. mr. mcclintock: i thank the gentleman for yielding. two years ago the president told us that we will all -- were all to blame for the housing bubble and the financial crisis that followed. well, no we're not. those families who passed up the get rich quick real estate seminars and who turned down the loans they couldn't afford, or who settled for a smaller home or who rented because that's all they could afford, they are not to blame. and they shouldn't be left holding the bag. 91% of americans are making

their mortgage payments, not only because it's the right thing to do, but because they know that the sooner the market corrects itself, the sooner their homes will begin to appreciate once again. by dropping up bad loans and by undermining responsible homeowners, our government's extending the agony and postponing the day when the markets stablizes and home buyers can safely re-enter the housing market. i yield back. the chair: the gentleman yields back. who seeks recognition? mr. bachus: i -- mr. frank: there's still disparate. mr. bachus: at this time, mr. chairman, i recognize the gentlelady from west virginia, mrs. capito, for one minute. the chair: the gentlelady is recognized for one minute. mrs. capito: thank you. i have been listening to the discussion. i certainly over the last several years have been in the committee where we have seen program after program being introduced to try to alleviate

the problem that we know exists with the foreclosure issue. this is about making choices today. this is about making choices about programs that are working. programs that are not working. programs that are costing too much. and programs that we need to reshape and reform. i believe this program is one that we can in good measure eliminate. it hasn't really gotten started. it's $1 billion program. in some sense we already know and we have heard from many in the discussion that 98 cents out of every dollar that's set forth as a loan in this program will actually be a forgiven loan. we are talking about fairness and mean-spiritedness. if it's fair to the rest of the folks who are working, scraping, paying their mortgages every single day, to know that 98 cents of every dollar that goes out the door in helping some other folks is never going to come back in when the original a agreement is a loan, this is a good sense cut that will lead to more jobs and better sense

government. the chair: the gentleman from massachusetts is recognized. mr. frank: i yield myself 15 seconds. i'm not surprised because there are people on the other side who think it's unfair to pay anything, like unemployment compensation. i don't think it's unfair to say to people unemployed in this economy they'll get economic help. that's what this is about. i yield 3:45 to the gentleman from new york. the chair: the gentlelady from new york is recognized for two minutes and 45 seconds. mrs. maloney: i rise in opposition to h.r. 836, this is one of four anti-foreclosure programs that the majority is voting to terminate. and this particular program they want to terminate today is designed to assist homeowners who have experienced a significant reduction in income or at risk of foreclosure due to loss of a job, involuntary unemployment, underemployment, or medical condition.

and this is a group that needs our help. there are $1.2 million households with a mortgage where head of household or spouse is unemployed. and in my home state of new york, mr. grimm, i wish i had the opportunity to ask him, was he aware that 142,000 households in our home state have a mortgage with a person who is the head of the household or spouse is unemployed. this program particularly could have helped those people. and the majority leader who spoke earlier, his home state, the great state of virginia, there are over 59,000 households who have a mortgage and with someone in the family who is underemployed or unemployed. and in the great state of texas, the largest number of households with the mortgage and head of spouse or head of household who is unemployed, there are over

172,000 families in this terrible situation. families across the country would benefit from the program. but instead they are cutting it and i'd like to ask unanimous consent to place in the record the census data that gives these numbers across our great country the number of people in this situation who could be helped by this program. the chair: the gentlelady's request has already been covered. mrs. maloney: the program fulfills an important gap because it addresses a temporary loss of income and helps homeowners when they are most vulnerable. it has been successful in pennsylvania which has its own state-run program. over 45,000 homeowners have been assisted with an average loan of $11,000, and 85% of these recipients have been able to stay in their homes as a result. if we continue this program, we would be able to help families across the country.

so i oppose terminating the program. and i oppose tossing hardworking americans out in the street. and i oppose this mean-spirited effort to terminate help for unemployed americans. now, to put this in perspective, this program is one of four that the majority is putting forward to terminate programs that would help the people stay in their homes. yesterday they terminated the f.h.a. refinance program. next week they are going to attempt to terminate hamp and the neighborhood stabilization program. yet economist after economist tell us that in order to strengthen our economy we have to stabilize the housing market. so these cuts are wrong. they are wrong in the first place and they are certainly wrong at this time when we are working to dig our way out of this whole and to get people

back to work. this program is like the others is narrowly tailored to help a specific class of homeowners because of this economy and because of the high level of unemployment. during the financial crisis we lost seven million jobs in this country. and we are slowly gaining jobs again, but we are not even at the point -- the chair: the gentlelady's time has expired. mrs. maloney: my time is expired and i urge a no vote on this bill. the chair: the gentleman from alabama. mr. bachus: i have no further speakers, mr. chair, on my side. so i would like -- other than myself. i would like to reserve my remaining time. the chair: the gentleman reserves. the gentleman from massachusetts. mr. frank: i yield three minutes to the gentleman from texas, mr. green. the chair: mr. green, the gentleman from texas is recognized for three minutes. mr. green: thank you, mr. chairman. mr. chairman, there's a more

basic and fundamental question that we are confronting today. that question is, can we continue to go out of our way to help major corporations? as a matter of fact $700 billion, can we go out of our way to help them and make sure that the programs work for them and then turn our backs on the taxpayers that helped those very same major corporations? that's the basic question that we have to contend with. are the banks and the major corporations too big to fail and are the tax-paying americans who helped bail them out too small to help? can we continue to end programs that help people stay in their homes that did not create the exotic products, that did not create prepayment penalties that coincide with teaser rates, that

did not create loans wherein you qualified for your teaser rate but you don't qualify for your adjusted rate, can we continue to allow them to be evicted when we can help some of them? we may not be able to help everybody, but when you can help somebody, you ought to try to do the best that you can and help those that you can. . with reference to the f.h.a. refi that passed in this house, that bill did not lose money unless persons failed to pay their mortgages. it was only if mortgages were not repaid that f.h.a. came forward and covered the cost. so to say that it cost $8 billion is incorrect. it cost whatever at the end of the program may have been spent but that money has not been spent so the money was there.

there was also a premium to be paid by persons who got the reify -- refis. it helped neighborhoods maintain property values. we can help people with emergency mortgage assistance. people who have lost their job through no fault of their own because of the downturn in the economy. it's a very simple premise. will we allow ourselves to save major corporations and deny the people, the taxpaying americans some help during their time of need? if there is one thing i heard from the american people was, where is my bailout? well, when we come up to the plate and actually help people who need and merit the help, somebody comes forward and finds a reason why we can't help them. this is the day to help those american people. let's not let them be too small

to help while others will allow banks to be too big to fail. i yield back the balance of my time. the chair: the gentleman's time has expired. the gentleman from alabama. mr. bachus: mr. chair, at this time i yield 3 1/2 minutes to the gentleman from texas, mr. hensarling. the chair: the gentleman from texas is recognized for 3 1/2 minutes. mr. hensarling: thank you, madam chair. again, we cannot lose sight of the fact that our nation is drowning in a sea of red ink. it is a sea of red ink that continues to hamper job creation. job creators today are uncertain of our future. they know, though, they know that historic levels of debt lead to historic levels of taxation which can only lead to historic levels of unemployment. they are looking for some signal from this body that we

get it, that we get it, that we're going to stop borrowing 40 cents on the dollar, much of it from the chinese, and sending the bill to our children and our grandchildren. again, when the annual deficit, the annual deficit was $200 billion in dropping as opposed to the monthly deficit which is now over $200 billion, but when the annual deficit was $200 billion, the gentleman from maryland, the democratic whip said that was fiscal child abuse. now, my friends on the other side of the aisle are introducing the term mean-spirited. i don't know. is fiscal child abuse mean mean-spirited? it's their term, madam chair. i'll let them reflect on that. now, i hear the ranking member talk about fiscal

responsibility, and he points to one item, cotton. we heard cotton throughout this debate. but i would note that the chairman, the ranking member apparently voted for the conference report on the farm bill which includes cotton subsidies that he comes to this floor to decry. he speaks about a w.t.o. decision, but it's the obama administration that says that countervailing measures would have cost this country more than $800 billion. mr. frank: will the gentleman yield? mr. hensarling: i would recommend that the ranking member have the debate with the obama administration. mr. frank: will the gentleman yield? mr. hensarling: because that's where we got this information. i will yield to the ranking member. mr. frank: there were two ways we could do it. i disagree with the president. we could have avoided that by reducing american cotton subsidies to the same amount as they do in brazil. so we could have either saved $300 billion or not.

mr. hensarling: reclaiming my time. reclaiming my time. i would just point out to the ranking member that was not the vote before us, and if there was a chance to get out the cotton subsidies -- and i must admit that both sides of the aisle voted for them -- but the opportunity was at the point on the conference report of the farm bill which the gentleman from massachusetts voted for. but to put this again in a larger context, we on this side of the aisle federal reservently believe that you will not have -- fervently believe that you will not help anything unless you put this country on a fiscal path. if we can't do it on this program what program can we do it on? i think it's ironic. how many of my friends on the other side of the aisle will come to the floor and say, you know what, there are people in this nation trying to force loans onto people who are unemployed, people can't afford

to pay it back, it's predatory lending, and now they want the government to do the same thing. mr. bachus: chair, i yield 30 additional seconds to the gentleman from texas. the chair: the gentleman is recognized. mr. hensarling: we heard throughout the debate there needs to be a consistency, a consistency of debate. let me get this right, a payday lender is guilty of predatory lending if they lend money to somebody who is underwater, somebody who may be struggling, but if the federal government does it it's something else. it's noble. i don't see the consistency in the debate there, madam chair. but, again, most importantly when does the day arrive that we quit spending money we do not have? i say today is that day. the chair: the gentleman's time has expired. the gentleman from massachusetts. mr. frank: how much time is remaining, madam chair? the chair: the gentleman from massachusetts has 3 1/2 minutes, and the gentleman from alabama has 9 1/2 minutes remaining. the gentleman from massachusetts.

mr. frank: do we have general leave? the chair: yes. mr. frank: thank you. i yield myself the remaining 3 1/2 minutes. first, the last comment was contradictory to the gentleman from texas. if it's forgiveness, then it's a predatory loan. the fact that it has very generous loans, it's scored at 84%, not 98%. the gentleman is self-contradictory because it cannot be both. secondly, as to agriculture, i did vote for a -- an amendment that would have changed it but the gentleman -- spectacle of my republican colleagues hiding behind obama is bizarre. you could have done what we offered which was to cut the $150 billion from going to brazil and then cut it out of america. but it's not the only item i mentioned. i mentioned $1.2 billion the gentleman wanted to send to the iraqi forces.

the $250,000 limit the republicans rejected on individual entities. so, no, there are billions in agriculture and the military. i didn't just mention one item. the gentleman does understand they're vulnerable so they blame obama. they are both wrong sending money to brazil. i hope in his final time the gentleman from alabama will address it. in the first place, on two of these programs, the hamp program, which we will deal with next week on the floor, and the f.h.a. refi, the money doesn't come from the treasury. they keep saying it but they are wrong. and ignoring a fact doesn't make it go away. those are funds that come from tarp. in the financial reform bill we reinforced an earlier provision, and i will subject it to the record. i'll put it in the record. it says the fdic is authorized to conduct risk-based

assessments on financial companies to pay for this, the money that's left in the tarp. we have a mandate to the fdic so that when the tarp is finished, large financial companies will have to pay this, not the treasury. so i know that troubles people on the other side. they are solicitous of these large financial companies, but when they talk about adding to the deficit they're wrong. it's statutorily required that this will come over their objection from the large financial institutions, and as to the other two programs, including the one today, we had similar language in our bill to do that. it was rejected by the republicans because we needed to get 60 votes in the senate. so, yes, for now, that $840 million will come out of the taxpayer. if we had our way and the republicans had not been successful in frustrating us, it would also come from goldman sachs and from morgan stanley and the other large institutions, and i will give them another chance. so the fact is the bulk of this money does not come from the treasury.

it is mandated that it will be repaid back to the tarp, and i hope the gentleman from alabama will address that in his final remarks. is he for repealing that? does he believe we should not, as we have said we would twice legislativively assess the large -- legislatively assess the large financial institutions and take it off? because if he doesn't it may reduce the bonuses at some of the large financial firms, it may reduce the dividends at some of the large financial firms but that does not reduce the deficit. as to the other money, the stabilization program and for this program, if they will come back with us and join that also will come from the large financial institutions. so let's drop the phony argument about the deficit. if you want to protect the large financial institutions be honest about saying so. the chair: the gentleman's time has expired. the gentleman from alabama. mr. bachus: madam chair, i claim the remaining time. the chair: the gentleman is

recognized. mr. bachus: the american people have sent us here to tell the truth, and the truth is there are too many government programs that do not work and actually make things worse. and these government programs are paid for by the american people. you can say that it's not from the treasury or that it's from the treasury, it's from tarp, it's not from tarp, but the fact remains that it's from the american taxpayer. in fact, the tarp fund, which the gentleman at one time said it comes out of the treasury. then he said it comes from tarp , but the promise in 2008 was it would go back to the american people, it would go

back in the national treasury, and in fact it does not and i'll address where it goes and i think the american people would be when they find out where it goes under this program they are going to be even more upset. and i don't think they'll be surprised because i think they've come to realize that there's not a lot of will in washington to protect them, the taxpayers. but the american people already know that there are too many effective government programs that cost too much. and this is a poster child for those programs. if you can't cut this program i'm not sure you can cut any. and when we find such programs we as the representatives of the people have a duty and a responsibility to the taxpayers to end these programs. and that's what we're doing this morning. we are going to end this program. that's what we're here for.

we are in this legislation by mr. hensarling we stop a $1 billion failed spending program. that's a well-intentioned program. but just as the road to hell is paved with good intentions so is the road to higher deficits and a record-breaking debt, a debt that our children and our grandchildren will have to pay. you know, when we talk about the taxpayers ultimately fund this program, when we borrow 42 cents out of every dollar it's our children and our grandchildren that will have to pay for these programs. we're charging something and we're telling them to pay the bill. today we have an unthinkable debt of $14 trillion. $14 trillion. a debt that imposes a birth tax on every child born in america.

it's $45,000 today. just last year it was $35,000. it's grown by $10,000. even worse this debt or birth tax is growing every day because our government is spending some days $5 billion, some days $8 billion more than it takes in. and adding to what our children and grandchildren will have to pay. one question that the american people often confront is, are they better off their parents and will their children be better off than they will and their grandchildren? it's interesting that -- in survey after survey, poll after poll, the american people say we're better off -- we were better off than our parents. our parents fought for our freedom, they preserved it in

numerous wars, they saved their money, they watched their money, they worked hard and they left us in good shape. but when that same question is a little different question, do you think your children or grandchildren will be better off, the american people, they know, they instinctively know. no is the answer sadly, and that's because of our national debt and deficit. in fact, both our secretary -- both our joint chiefs of staff and robert gates has said that it's a national security problem. our debt threatens our very existence as a country. . ? washington spending binge is driving our country right off a cliff. we have seen the effect of overspending on our economy today. the government absorbs so much money from our citizens that it's hard to create private

jobs. each dollar out of the economy is a job that the private sector can't create. now, actually governor -- president reagan and president clinton both realize this and they grew the economy. and those were the only two years with a growing economy. and government spending either level or going down. that's the only time in our country we had a surplus. they both realized that it was the private sector that would see us out of this. so this growth, growth in the federal government and spending is hampering job creation. and that's what these homeowners need. they need a job. let's look at this program. and this is from the obama administration, this is their budget that was just filed. here's what the american people need to know.

what does this program do? it offers a loan of $50,000, up to $50,000 to pay all arrearages to homeowners on their first mortgage. $50,000. and then to pay up to 24 consecutive months of mortgage payments. 24 months of their mortgage payments. now, both the gentleman from texas and the gentleman from massachusetts kept talking about the large financial institutions . that's who is owed the money. and in fact we are not getting this money from the large financial institutions, just the contrary, we are paying them. because they are the ones that hold this mortgage. so when the taxpayers write a $50,000 check under this program to pay a rearages on the mortgage, who do you think it

goes to? it goes to bank of america, it goes to morgan chase, it goes to citigroup. and it's shocking that the gentleman from massachusetts would actually say that this money is coming from the very institutions that are going to receive this money. this billion dollars is not going to homeowners. it's going to these large finance igs tuesday the -- institutions. he says they are the one that is ought to be paying this not the homeowners or not the taxpayers. we always thought the homeowners were supposed to pay their mortgages, but i think we could all agree, i think we could all agree that it's not the taxpayer. it's just an astounding thing. and he says that flip wilson, if flip wilson told us to vote for something, we would. it wasn't flip wilson.

it was ron kirk. and would did he tell us? listen, if i were chairman frank, i would talk about anything but this failed program. i mean i think that's why they have talked about everything but this failed program. mr. frank: would the gentleman yield? mr. bachus: because it was ron kirk that told us that our automobile sector would suffer, our pharmaceutical sector would suffer. he said that this would cost jobs and medical equipment, electronics, textiles, wheat, fruit, nuts, cotton. he did include cotton. he said $60 billion worth of exports were at risk. do the math. 7,000 jobs for each billion dollars worth of exports, that's 420,000 jobs. do you want to vote against something that would put 420,000

americans out of jobs? and then they would all line up for another government program. that the minority would design. the other thing, this is the last thing i'll say, they keep saying that taxpayers will get paid back. well, let me introduce this. this is from the obama administration, this is their same budget for the physical -- fiscal year 2012. it estimates the losses on this program, they have accused us of making up these figures, 97.72, that's the loss on this program. for what purpose does the gentleman from maryland rise? >> i move to strike the last word. the chair: the gentleman from maryland is recognized for five minutes. mr. cummings: thank you very much, madam chair. as i stand here and sat here and

listened to all of this, there are somehings that are missing from this discussion which i think that we are forgetting. and that sometimes i think do we forget that this is america? this is a country that has gained its power through its moral authority, not necessarily by its military might. and we have heard discussions this morning about kicking the can down the road, putting money into a rat hole. and the more think about it, madam chair, i think it is a very sad day when somebody from a state with high foreclosures can get up and talk about destroying a program that will

help his own neighbors. the's something wrong with that picture. presidenbarack obama uses a term i wish i had invented. he says that we have an empathy deficit our country. i wonder what it's going to feel like on sunday when my colleagues go to church, read from the same bible that i read from, and can brag about the fact that they was able to kill a program that would allow some 30,000 people to stay in their own homes. while at the same time when i go to church i'll have to explain to them why they did it. we are better than that. we are better as a nation, we are better. and it's easy for people to go

home. you'll go home tonight, you'll fly home, you have a nice warm house, but let me tell you about the other america. the america that has come to find foreclosure to an event i held in my district 40 miles away from here. they come in with papers in hand because they simply want some relief. they have lost their jobs. through no fault of their ow they come in with tears running down their faces, they are black, they are white, they are hispanic, they are asian, they are americans. so you say to them, the dollars that you pay, i don't want to use them to help you stay in your house, in their houses, your house, in their houses, they are the same a